A new Australian retail central bank digital currency: consumer law considerations

Because Australia has considered the deployment of a retail central bank digital currency (rCBDC), it is important to examine its compliance with the Australian Consumer Law (ACL) because central bank money represents the bank's responsibility to depositors/holders. To do so, it is useful to consider the evolution of consumer policy, the nature of money and banknotes, account-based and tokenbased 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 will it comply with the fit for purpose requirement. After analysing the rCBDC proposal and existing consumer law, it is suggested that the required cryptography mechanisms use for rCBDCs does not assist it with complying with the "fit for purpose" requirement under ACL. A glossary of terms used in this article, concludes it.