Reserve Bank of Australia considers exploring central bank digital currency use cases

The Reserve Bank of Australia is furthering its Central Bank Digital Currency (CBDC) race to discover CBDC use cases in the country. There is collaboration between Australia and the Digital Finance Cooperation Research Center (DFCRC) on relevant research proposals.

Reserve Bank of Australia could be a CBDC use case

As stated in the August 9 declaration, the DFCRC-Reserve Bank mutual project will be centered around innovative utilities and business models to support the launch of the CBDC. Legal, technical and regulatory aspects will be further evaluated during the course of the project. The project’s pilot phase will extend to almost a year in which the CBDC will operate in a ring-fenced environment.

Industry stakeholders will be invited to contribute specific use cases and will be evaluated by the DFCRC. Selected cases participate in their respective pilots and produce exclusive reports. The Reserve hopes to publish a document with additional details about the project in the coming months. Reserve Bank Deputy Governor Michele Block said the CBDC project is of great significance as a further move in CBDC research.

He added that he is in the process of joining a large list of industry members to better understand the benefits that a CBDC may offer within Australian jurisdiction. The DFCRC counts as a research program of up to $180 funded on behalf of industry members, the Australian government and universities.

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These funding agencies are focused on forging ties between stakeholders working in the financial industry, regulation and academia to deliver the opportunities created by the imminent transformation of financial markets. On August 5, the Bank of Thailand announced that it would launch a pilot project to test a multi-year retail CBDC. The project is expected to begin by the end of this year.

In 2020, the RBA has declared that it will operate on a CBDC by developing a proof of concept (POC) to release a digital dollar that will be tokenized and utilized on the wholesale market. China’s ‘eCNY’ has witnessed considerable development and a lengthy trial of mainstream utilities in February under the Winter Olympics, so central banks around the world intend to stay in the race. Reserve Bank of Australia considers exploring central bank digital currency use cases

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