RITS Set for a Major Overhaul to Remain Fit-For-Purpose
As part of a comprehensive plan to keep abreast of the rapidly evolving financial landscape, the Reserve Bank Information and Transfer System (RITS), Australia’s high-value settlement system, is poised for modernisation. This move is likely to pave the way for the implementation of a wholesale central bank digital currency (CBDC) in the country.
The RITS is a pivotal part of Australia’s financial framework. It settles an average of $300 billion per day, enabling banks and other financial institutions to meet their payment obligations on a real-time gross settlement (RTGS) basis. The system also encompasses the Fast Settlement Service, which settles transactions submitted via the New Payments Platform feeder system, also on an RTGS basis.
The Need for Modernisation
Despite the RITS’ efficiency and security, there is a growing recognition of the need to keep pace with the evolving financial landscape. “While RITS continues to work well and remains secure and efficient, we recognise that because it is the critical central settlement infrastructure for Australia, it needs to remain fit-for-purpose not just now but into the future,” Michele Bullock, the Reserve Bank governor, stated in a recent speech.
From 2026, the Reserve Bank will begin exploring options to modernise the RITS. This could involve the implementation of modern data exchange methods to enhance user experience, extending operating hours for added flexibility, and widening the scope of transactions that can be settled using central bank money.
Exploring New Forms of Digital Money
Simultaneously, the Bank is also conducting research into how new forms of digital money, such as CBDCs and privately issued tokens, could be utilised to support wholesale payments and settlements. This research is expected to provide valuable insights into how the Reserve Bank’s settlement infrastructure may need to evolve to stay relevant.
“With payments and financial market transactions innovating rapidly, modernising RITS is essential to ensure Australia’s payments infrastructure remains fit for purpose, supporting innovation, resilience and economic growth,” Bullock said.
This proactive approach to modernisation reflects the Reserve Bank’s commitment to maintaining a robust and resilient financial system that can respond to the changing needs of users. As new forms of digital money continue to emerge, the potential upgrade of RITS will ensure that Australia’s payments infrastructure remains ahead of the curve, fostering innovation and economic growth.
Source: Here
