A new Australian central bank digital currency: consumer law considerations

Because Australia considered the deployment of a retail central bank digital currency (‘rCBDC’), it is important to consider its compliance with the Australian Consumer Law because central bank money represents its responsibility to depositors/holders. In order to do so, it is useful to consider the evolution of consumer policy, the nature of money and banknotes, account-based and token-based payment systems, and the ‘fit-for-purpose’ requirement in Australian consumer protection law. Issues that need to be addressed include the proposed legal definition of ‘money’, the potential implications of rCBDC as an electronic representation of the Australian dollar and how it will comply with the fit-for-purpose requirement. After analysing the rCBDC proposal and existing consumer law, it is suggested that the required cryptography mechanisms used for rCBDCs do not assist it with complying with the fit-for-purpose requirement under Australian Consumer Law.