• The Reserve Bank of Australia (RBA) is looking to establish use cases for a central bank digital currency (CBDC).
• The project will be conducted in collaboration with the Digital Finance Cooperative Research Centre (DFCRC) and involve multiple Australia-based banks.
• It intends to analyze 14 different CBDC use cases, including pilots that will explore CBDC distribution, offline payments via CBDCs, cross border settlement and custody, GST automation and tokenized bills.
Australian Central Bank Launches Project to Explore CBDC Use Cases
The Reserve Bank of Australia (RBA) is conducting a research project over the coming months in order to analyze 14 different central bank digital currency (CBDC) use cases. The project will be conducted in collaboration with the Digital Finance Cooperative Research Centre (DFCRC) and involve multiple Australia-based banks.
Selection of Use Cases
The regulator said that it received a 140 total use case submissions and made the final selection based on a variety of factors — including their „potential to provide insights into the possible benefits of CBDCs“. These selected use cases include pilots that will explore CBDC distribution; offline payments via CBDCs; cross border settlement and custody; GST automation; tokenized bills; livestock auctions; construction supply chain payments and superstream payments, among others.
The DFCRC said that consumers are increasingly participating in web3 commerce across multiple public blockchains and are forced to use private cryptocurrencies, which have myriad risks associated with them compared to a central bank-backed currency. One of the pilots in the project aims to develop a „trusted and reliable form of money“ on the blockchain. It will explore how a CBDC can be tokenized on multiple blockchains, as well as how to ensure that only authorized parties can hold and redeem it. Authorized parties would be entities that are properly licensed or regulated by government authorities such as banks or other financial institutions.
Potential Economic Benefits
RBA Assistant Director Brad Jones stated that this pilot program aims “to contribute to hands-on learning by industry” so they can better understand what potential economic benefits could come from implementing a central bank digital currency within Australia’s financial system.
This research project also involves using an Ethereum-based version of Australian Dollar called eAUD which was developed by RBA last year. This eAUD token is intended for testing out various payment scenarios with different types of participants such as businesses, governments, financial institutions etc., so they can gain first hand experience before making any decisions regarding its implementation within their business model or operations.