At its August 2025 meeting, the Payments System Board reviewed several key issues affecting Australia's financial market infrastructure and payments system.

The Board discussed the regulatory response to the CHESS batch failure incident that occurred in December 2024. Members examined ASX's plans to ensure that the current CHESS system is properly operated, maintained, and supported as critical financial market infrastructure. While early progress was noted, significant concerns remain. The Board agreed on further regulatory steps to ensure that the CHESS Replacement project is designed with appropriate resilience for such critical infrastructure.

The annual assessment of ASX clearing and settlement facilities against Financial Stability Standards was also considered. The Board endorsed the Reserve Bank of Australia’s (RBA) assessment, which will be published after it has been provided to ASX, the Treasurer, and the Australian Securities and Investments Commission (ASIC). Members observed that ASX has made limited progress in addressing fundamental concerns related to operational resilience and risk management over the past year. They also noted that ASX’s response to the December 2024 CHESS batch failure showed a need for urgent improvements in governance and risk culture. The Board highlighted that successful delivery of current risk management, technology, and transformation initiatives is crucial for maintaining services vital to Australia’s financial stability.

Oversight of international financial market infrastructures was another topic. The RBA monitors entities such as LCH SwapClear, CME, Clearstream Banking, Euroclear Bank, CLS, and Swift. Many are undergoing multi-year programs aimed at modernizing systems and enhancing resilience. The Board emphasized strong project governance, testing procedures, and migration strategies as essential for safety and resilience of these infrastructures. They also discussed risks from increased reliance on a small number of third-party service providers by financial market infrastructures. The Board welcomed ASIC’s decision to grant Clearstream Banking a clearing and settlement facility licence and stressed the importance of adequate oversight by both RBA and ASIC.

System-wide resilience within Australia’s payments system was addressed as well. With growing complexity in operational risk environments, regulators and entities are expected to focus more on interdependencies across systems. The Board endorsed ongoing research into interoperability issues, third-party risks, concentration risks, arrangements for high-value payment resilience, and vulnerabilities related to utility outages.

Members discussed challenges facing cash distribution arrangements in Australia. There is an ongoing need for industry cooperation toward building a durable future distribution system supporting cash availability nationwide—including rural areas—since cash remains important for many Australians as both a primary payment method and backup during electronic payment disruptions. A new proposed regulatory framework for cash distribution service providers—recently consulted on by CFR and ACCC—is expected to help manage continuity risks across Australia.

The review of merchant card payment costs and surcharging included an update on stakeholder responses following a July consultation paper release. Feedback focused on how proposed regulations might affect competition among small issuers and fintechs while enabling innovation. Members held preliminary discussions about possibly reducing regulatory burdens on small issuers; this issue will be further considered during ongoing consultations.

Finally, global developments in stablecoins were reviewed amid sharp growth in this sector—primarily concentrated among US dollar stablecoins—and expansion into new use cases like cross-border transactions. Members examined emerging international regulatory frameworks while noting Australia's domestic stablecoin market remains small but could have broader implications if it grows significantly. The Board welcomed government reforms aimed at ensuring stored-value facilities—including stablecoins—operate under robust regulation.