• The Reserve Bank of Australia (RBA) is researching different use cases for a central bank digital currency (CBDC).
• The project will be conducted in collaboration with the Digital Finance Cooperative Research Centre and involve multiple Australian banks.
• The project includes pilots to 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.
Australian Central Bank Launches Project to Explore CBDC Use Cases
The Reserve Bank of Australia (RBA) is looking to establish use cases for a central bank digital currency (CBDC) and determine the economic benefits it can have through a new research project over the coming months. The project will be conducted in collaboration with the Digital Finance Cooperative Research Centre (DFCRC) and involve multiple Australia-based banks. It will also involve the use of the Ethereum-based CBDC developed by Australia called the eAUD.
Use Case Selection
The regulator said that it received 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“. The project intends to analyze 14 use cases for CBDCs. Banks will serve as „use case providers“ for the different use cases.
The project includes 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 a few 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 verified by regulatory authorities such as financial institutions or government agencies.
Potential Benefits Of A CBDC
RBA Assistant Director Brad Jones said:“The pilot and broader research study that will be conducted in parallel will serve two ends – it will contribute to hands-on learning by industry, and it will add to policy makers‘ understanding of how a CBDC could potentially benefit the Australian financial system and economy.“ If successful, this research project could lead to tangible benefits from utilizing modern technologies such as blockchain for more efficient payment systems in Australia’s economy.