The Reserve Bank of Australia (RBA) white paper We launched a central bank digital currency (CBDC) pilot on September 26, joining the league of countries considering CBDC.According to the Atlantic Council CBDC TrackerAustralia is one of 97 countries that have either launched a CBDC or are currently engaged in research and development and have pilot projects underway.
The RBA has published a white paper in association with the Digital Finance Cooperative Research Center (DFCRC), a $180 million research program funded in part by the Australian government.
According to the whitepaper, the aim of the pilot project is to explore innovative use cases for both retail and wholesale and business models that would benefit from CBDC. The project will begin in July of this year and is expected to be completed by mid-2023.
The DFCRC will provide the platform for the CBDC and the RBA will handle the pilot CBDC issuance and redemption as well as regulatory oversight. This main platform will be responsible for managing and tracking the pilot CBDC, eAUD.
CBDC use cases will be tested by industry participants. Industry participants must design and operate their own technology his platform to implement approved use cases. However, according to the whitepaper, industry players cannot use code or smart contracts on his CBDC platform.
Platforms developed by participants will be integrated with the pilot CBDC platform through a privacy gateway. These participants will offer services that utilize the pilot CBDC through their own platform. Participants are responsible for Know Your Customer (KYC) verification of CBDC end users as per the whitepaper.
The eAUD platform will be developed and installed on a private and licensed version of Ethereum. Its ledger is therefore centralized under the leadership of RBA. Access to the platform is restricted to selected use case providers and their authorized end users.
eAUD is issued as a debt of the RBA and is denominated in Australian dollars. The RBA does not provide interest on eAUD. eAUD can be stored in a custodial wallet provided by the use case provider or in a non-custodial wallet owned directly by the user.
The use case provider is also responsible for compliance with all regulatory guidelines and the cost of piloting.
At the conclusion of the pilot project, which is expected to end in April 2023, the RBA and DFCRC will publish a report on the findings, including an evaluation of the use cases developed.
Primarily, the aim of the pilot project is to identify different use cases that benefit from the economic benefits of CBDC and Australian CBDC. The project will also explore policy and regulatory issues related to CBDC operations. The idea is to identify the “foundation” of CBDC. In other words, the project aims to answer the question of whether the country really needs her CBDC.
Change in attitude towards CBDC in Australia
In 2020, the RBA will: no compelling case To issue a retail CBDC in Australia. However, in 2020-2021, the RBA has joined ‘Project Atom’ with the Commonwealth Bank of Australia (CBA), the National Bank of Australia (NAB), Perpetual and ConsenSys. A proof-of-concept CBDC developed in Project Atom potential advantage Wholesale CBDC’s.
The RBA also participated in Project Dunbar with the Bank for International Settlements (BIS) Innovation Hub and other central banks. Project Dunbar has shown that CBDCs can reduce the cost and time it takes to process cross-border transactions.
So, along with the eAUD pilot project, the RBA is also considering the role of private and regulated stablecoins in the future economy.