guy debelle : developments in global fx markets and challenges in currency internationalisation from an australian perspective speech by mr guy debelle, assistant governor ( financial markets ) of the reserve bank of australia, at the rmb fx forum ( appearance via video link ), beijing, 18 may 2016. * * * thanks to david halperin and eden hatzvi for their help in compiling these remarks. i am very pleased to have the opportunity to speak at this event today. australia takes a keen interest in the ongoing process of internationalisation and liberalisation of the renminbi ( rmb ). i am sure you will hear many interesting perspectives on that subject today. i would like to talk about three things. first, i will talk a little about the use of the rmb in australia. second, i will talk about the rmb ’ s increasing role in the global economy and relate that to the work i am leading on the global code of conduct for the foreign exchange market. finally, i will provide an australian perspective on currency internationalisation and capital account liberalisation, reflecting on the challenges that emerged as australia went through this process in the late 1970s / early1980s. 1 turning to the use of the rmb in australia. first, from the rba ’ s own point of view, we have invested a portion of our foreign exchange reserves in rmb since 2013. this has allowed us to get direct insight into the way the fx and bond markets function in china, and has also allowed us to experience first - hand the benefits of the ongoing liberalisation that has occurred in recent years. in june 2015, the people ’ s bank of china ( pbc ) reported that foreign central banks and monetary authorities held over rmb650 billion in rmb denominated assets and that has almost certainly grown larger today. the rba and pbc also established a bilateral currency swap in 2012 for rmb200 billion that was renewed last year. the swap line highlights and supports the growing financial linkages between the two economies as well as trade and investment. to help further remove possible impediments to the use of rmb in australia, an official rmb clearing bank began operation in sydney in february 2015. in addition, australia was granted an rmb50 billion rqfii quota for portfolio investments. finally, for a number of years now, the australian dollar has been directly traded against the rmb in the onshore fx market. this has allowed for the growing

systems is a principal focus for the psb. rba staff are closely monitoring the ability of market infrastructures to upgrade their technologies and manage these risks, including relating to third - party service providers. 1 / 3 bis - central bankers'speeches priority # 2 : supporting reforms of the regulatory framework for payments and market infrastructures as regulators need to have the powers to address emerging issues in the payments system, the psb continues to strongly support the government's ongoing reforms to modernise the regulatory framework. rba staff are also operationalising our new crisis management and supervisory powers for clearing and settlement facilities that featured in the recent reforms to financial market infrastructure regulation. priority # 3 : lowering the cost of card payments for merchants, especially small businesses the rba recently launched a review of merchant card payment costs and surcharging. options under review include those aiming to reduce the level and complexity of wholesale fees in card payments and promoting greater transparency for merchants. the review is also examining whether limits need to be placed on surcharging. stakeholder submissions on these issues are invited by early december. 2 priority # 4 : improving cross - border payments, which remain expensive, slow and opaque the psb is encouraging the adoption of internationally harmonised messaging capabilities and enhanced functionality for cross - border payments. a recent example was the launch of the npp's international payments service, which will significantly speed up incoming cross - border payments. rba staff also continue to examine options for linking fast payment systems across countries. priority # 5 : actively shaping the future of digital money this is a clear priority for the psb and also features in the rba's corporate plan. in september, we published a paper with treasury that set out our assessment of the case for central bank digital currency ( cbdc ) in australia, and for the first time laid out a three - year roadmap for future work. 3 at present, we assess the benefits to the economy as more promising, and the challenges less problematic, for a wholesale cbdc compared with a retail version that would be available to the general public. as i recently discussed, the rba has made a strategic commitment to prioritise our applied research on the role that cbdc could play in lifting the efficiency and resilience of wholesale markets in australia. 4 to that end, we are about to invite responses to a consultation paper on a new research project, project acacia. with industry partners, we look forward to exploring how innovations in