- The Australian central bank has announced several projects that will develop use cases for its domestic CBDC.
The central bank is expecting to complete its CBDC pilot, which kicked off last August, by mid-2023.
The Reserve Bank of Australia (RBA) has announced several projects that will develop use cases for the eAUD, the central bank digital currency (CBDC) of Australia, during its testing phase.
The projects will investigate use cases ranging from offline payments to bond settlement to securities trading, among others. This information was shared via a 2 March press release published by the Australian central bank.
According to RBA Assistant Governor Brad Jones, the participants of these pilot projects include a diverse range of industry representatives, ranging from smaller FinTechs to large financial institutions. The pilot and larger research study, to be conducted concurrently, will serve two purposes.
First, it will help industry gain hands-on experience; second, it will help policymakers understand how a CBDC might benefit the financial system and economy of Australia.
Multiple Companies brought together for the CBDC Pilot
The Australia and New Zealand Banking Group Limited (ANZ), Mastercard, Monoova, the Australian Bond Exchange, DigiCash, Commonwealth Bank are among the pilot project partners initiated by the central bank.
Some of these projects will deal with issues such as using a CBDC for offline transactions. Smart cards preloaded with funds, as per the project description, could enable offline payments, though the project will focus on a consumer-to-merchant scenario.
Another project will look into using the USD Coin [USDC] to make foreign exchange trades and remittances easier. The project will look into whether international transfers can be made round the clock while minimizing counterparty risk.
The digital dollar experiment of the Australian central bank is one of many such initiatives by central banks around the world. A CBDC represents not only the transition to a more digital economy, but also a safer alternative to private cryptocurrencies.
The central bank will reportedly complete its CBDC pilot, which kicked in August 2022, by mid-2023.
