Reading a Reserve Bank of Australia speech on "Financial Innovation and the Future of CBDC" released today.

If I am reading this correctly their biggest concern of issuing a retail CBDC is facilitating bank runs and that if each Australian household was to withdraw only $5,000AUD it would put banks dangerously close to minimum internal liquidity buffers.

That seems like a surprising small amount to cause such panic. Imagine if there was something that each household could convert $5,000 to... 🤔

The RBAs proposal to stop bank runs to a digital currency occurring is in times of crisis to limit holdings and apply negative interest rates to CBDC holdings. Imagine if this something else couldn't do that... 🤔