at http : / / www. nber. org / papers / w18315. see phelps e ( 2013 ), mass flourishing : how grassroots innovation created jobs, challenge, and change, princeton university press, princeton. see mokyr j ( 2013 ), “ is technological progress a thing of the past? ”, eu - vox essay, 8 september. available at http : / / www. voxeu. org / article / technological - progress - thing - past. bis central bankers ’ speeches i don ’ t profess to know which of these views is correct – only time will tell. what underlies these debates though is that the ability of a society to innovate, to take and manage risks and to respond quickly to the changing world helps determine the rate of productivity growth. improvements in productivity require existing resources to be used more efficiently or advances in technology – they do not occur from doing the same thing over and over again without change. so if we are to improve efficiency and advance technology then innovation is required and innovation requires someone to take a risk – the risk of trying a different process, the risk of changing workplace organisation and management practices, or the risk of spending scarce resources to explore a new idea. sometimes the effort will not pay off, but just occasionally it will, and when it does, we find a better process, a more efficient organisational design or an idea that transforms how we do things. the point i want to emphasise here is that regardless of whether the techno - pessimists or the techno - optimists turn out to be correct, our attitudes to risk - taking, to innovation and to entrepreneurship have a significant influence on our future living standards. at this point, i would like to return to one of the questions i asked you to think about at the beginning : how has our society ’ s attitude to risk and innovation evolved over time and what are the implications for productivity growth? my own tentative answer is that there has been a subtle, but important, shift in the way we think about risk and innovation. in particular, our preferences appear to have shifted in such a way that we increasingly focus on risk mitigation and risk control. there are examples of this in a whole range of activities in our society – from the nature of the legislation that parliaments pass, to the increase in compliance activities in the nation ’ s boardrooms, to the amount of money we are prepared to spend to limit the probability of blackouts

, spoke last week about some of the issues we are working through regarding the possibility of a cbdc for retail purposes. [ 4 ] we have an open mind as to whether a public policy case will emerge to go in this direction. however, as things stand today, that case has not yet been established. we are, though, exploring the possibilities in case this assessment changes. as part of this effort, we have embarked on a project with the digital finance cooperative research centre involving the issuance of a pilot cbdc that has real value, circulating in a ring - fenced environment. we have invited industry participants to propose use cases to test in this environment, the idea being that this could help us understand new business models and payment solutions that a cbdc could support. we are also looking at potential use cases for a wholesale central bank digital currency, which could supplement the existing exchange settlement accounts we offer. interest in participating in the project has been very strong, with over 140 submissions of use cases. testing will commence soon and we look forward to publishing the results next year. we are also looking at the pros and cons of an alternative form of a digital australian dollar – a payments stablecoin that is issued by the private sector, just as banks issue deposits. if we were to go in this direction, the payment stablecoins would need to be backed by a strong regulatory regime, just as applies to deposits. modernising the regulatory regime the rba is also working with the government to make sure that the regulatory regime is fit for purpose. the bank welcomes the release of the consultation paper on the strategic plan for the payments system. this plan helps to provide guidance for industry and regulators on the government ’ s key priorities for the payments system and we look forward to working with interested parties. from our perspective, one reform priority is the establishment of a new licencing regime for payment service providers ( psps ). this could help overcome some of the challenges faced by psps seeking to enter the australian market. the bank is also working on a set of common requirements for psps seeking to access payment systems, as part of the new licensing regime. the aim is to create a more level playing field for non - adi payment service providers in a way that balances the needs of the payment system operators and psps. the bank is also developing a new regulatory regime for industry bodies that set technical standards for the payments industry. a second priority is the development of regulatory arrangements