Payments System Board Update: May 2021 Meeting

21 May 2021 Tony Hooper Monetary Policy, RBA

At its meeting today, the Payments System Board discussed a number of issues, including:

The Bank’s Review of Retail Payments Regulation. The Board discussed and approved a consultation paper seeking stakeholder views on the preliminary conclusions to the Review. The Bank expects to release this paper, including draft revisions to the Bank’s standards, within the next two weeks.
The Bank’s assessment of Australia’s real-time gross settlement system – the Reserve Bank Information and Transfer System (RITS) – against the relevant international standards. The Board approved the assessment, which the Bank will publish in coming weeks.
Financial market infrastructure (FMI) regulatory reforms. The Board welcomed the Government’s plans to introduce a package of FMI regulatory reforms. The reforms, which were consulted on in 2019 by the Council of Financial Regulators, will equip regulators to mitigate systemic risks and respond effectively in the event of financial crises, with the Bank to have responsibility for resolution of clearing and settlement facilities in extreme events.
Initiatives to enhance cross-border payments. The Board places a high priority on progress in improving cross-border payments and was briefed on the Bank’s involvement in the G20 Roadmap.
The Bank’s wholesale central bank digital currency (CBDC) research project. The Board discussed the preliminary findings from a collaborative research project that the Bank is undertaking with a number of external parties. A public report on the project and its findings is expected to be published around the middle of the year. The project is part of the Bank’s ongoing research program on CBDC.
Australia’s banknote distribution system. Members discussed the trend decline in cash usage and its implications for the economics of banknote distribution. The Bank will be commencing a consultation on banknote distribution arrangements in the second half of the year.
The recent update by NPP Australia (NPPA) of its roadmap for the New Payments Platform (NPP). The Board expects the major elements of the roadmap, including the new third-party payment initiation capability, to be implemented according to the revised schedule. The Board agreed to postpone the second review of NPP access and functionality that the Bank had planned to commence with the Australian Competition and Consumer Commission (ACCC) by the middle of this year; this decision was taken in light of the ACCC’s ongoing consideration of NPPA’s proposed merger with BPAY and Eftpos Australia and also pending the outcome of Treasury’s Payments System Review.