The governor of the Reserve Bank of Australia (RBA) has all but ruled out creating a central bank digital currency (CBDC) for everyday people to use to send money to each other and conduct transactions, saying our existing payment is already “very efficient”.

Speaking at the Australian Financial Review’s Business Summit this week, Lowe – who has been under heavy public scrutiny following ten consecutive interest rate rises – said he was “very sceptical” of the notion that there is a need for a retail CBDC in Australia.

“We’ve got a very efficient payments system in Australia where you can move money between any two bank accounts in five seconds just by knowing someone’s mobile phone number, and it’s free,” Lowe said.

“How could we offer digital tokens which would be better than that?”

Such a token would be “costly to develop” and Lowe said the bank “[doesn’t] think the public policy case is there”.

RBA is experimenting with a wholesale CBDC that could be used to settle accounts between banks and would see improvements to “the efficiency of the payments and settlement processes”, but most of this would happen “behind the scenes”.

It’s a vastly less radical proposal than a retail CBDC which would function as the digital equivalent of bank notes.

Such a general-purpose digital currency would make RBA the intermediary between actors – individuals, merchants – within an economy, rather than banks and payments platforms.

Experts have warned that a retail CBDC would lead to “deep, fundamental structural changes” within our economy by bypassing banks and shifting power into the hands of the government-owned RBA.

Other countries have trialled this form of retail CBDC, including China where its central bank is rolling out the eCNY – albeit with a relatively slow adoption rate.

Some have warned that the eCNY could allow for greater surveillance and social control by giving the government direct access to payments and transfers.

There are further concerns that China’s lead on CDBCs could see it topple the US dollar as the de-facto reserve currency, with downstream effects on the how international sanctions are enforced.

When pressed about these international developments, Lowe said the RBA would “look at the arguments and experiences” abroad and then “decide whether those same arguments apply here”.

“If this is the way the world goes then we’ll be a part of it,” he said. “At least at the retail level you shouldn’t expect us to be right at the front, but we could be a fast follower.”

Last week, RBA announced the use-cases and providers for limited-scale test runs of a CBDC in different industry contexts.

Those pilots include offline payments, livestock auctions, GST automation, and an “interoperable CBDC for trusted Web3 commerce”.

Brad Jones, Assistant Governor of the RBA, said the project “will contribute to hands-on learning by industry, and it will add to policy makers’ understanding of how a CBDC could potentially benefit the Australian financial system and economy”.