At its meeting today, the Payments System Board discussed a number of issues, including:
- The recently announced delay in the project to replace CHESS, ASX’s system for clearing and
settlement of cash equities. Both the Bank and ASIC expect that CHESS be replaced as soon as this can
safely be done by ASX and users of CHESS. The Board reiterated its expectation that ASX consult a
broad range of stakeholders on setting a new timeline, and ensure that this timeline provides
- 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.
- The Bank’s Review of Banknote Distribution Arrangements. The Board discussed the key
issues facing participants in the cash distribution system. It reviewed options to help the system
remain efficient, sustainable and resilient, and to enable the industry to transition, as cash use
by the public evolves. A paper setting out stakeholder feedback and the Bank’s response will be
published in the coming months.
- Payments system regulatory reforms. Members discussed the Bank’s work to support the payments
system regulatory reforms announced by the previous Government in December. A number of the reform
measures are relevant to the Bank, including the modernisation of the Payment Systems
(Regulation) Act 1998. The Bank has been working on the development of common payment
system access requirements that could be incorporated into a new payments licence. The Bank will
continue to work with Treasury on the reforms.
- Recent market and regulatory developments relating to stablecoins. The Board discussed the recent
volatility in crypto-asset markets, including the issues affecting a number of US-dollar denominated
‘stablecoin’ arrangements. The events highlighted some of the risks associated with
stablecoins that regulators internationally are seeking to address. Members were supportive of the
work being undertaken by the Council of Financial Regulators to develop options for the regulation of
payment stablecoins as part of the proposed regulatory framework for stored-value facilities.
- Merchant payment costs. The Board reviewed the latest data on merchant payment costs. Members noted
that the average fee incurred by merchants for processing card transactions continued to trend down
during the pandemic, both in aggregate and across most merchant sizes. This had been driven by an
accelerated shift away from credit cards to (less expensive) debit cards by consumers. An analysis of
the latest data will be published in a RBA Bulletin article in September.