To no one’s surprise, Australia is now testing CBDC. Central bank digital currencies have been debated for a long time. Some authorities consider them dangerous and easy to abuse, while others are pursuing pilot programs.
of white paper Description of Continental Island Initiatives was created in collaboration with the Digital Finance Joint Research Center. The author of the same is the Reserve Bank of Australia, the country’s central bank.
According to the documents, the eAUD, which will become a liability of the RBA and valued in Australian dollars, will become known as a pilot CBDC. With this pilot program, the Central Bank of Australia wants to see if a central bank digital currency is a good fit for Australia. The bank also acknowledges that it has been working on the issue “for the past few years.”
The Reserve Bank of Australia also confirmed what was widely speculated but previously unknown.
“Central banks around the world are actively investigating the potential roles, benefits, risks and other implications of CBDCs. It includes a CBDC pilot that includes real financial transactions.”
The Central Bank of Australia is looking for solutions to specific problems. First, which future business models and use cases are supported by CBDC but not well supported by Australia’s current payments and settlements infrastructure?
Second, what are the potential economic benefits of Australia issuing a CBDC? Last question – operational, technical and policy issues that need to be resolved to operate a CBDC in Australia. , and what are the regulatory concerns?
The central bank’s digital currency pilot project is “domestic-focused in terms of participants and use cases,” according to the white paper.
Australia chooses Ethereum
Add a new use case to your Ethereum resume. His highly centralized Australian CBDC pilot could use the technology to create a viable model at no additional cost.
A private and permissioned Ethereum (Quorum) implementation, the eAUD platform is created and configured by the DFCRC. The RBA will be responsible for managing and overseeing the eAUD Ledger, which will act as a centralized platform.
However, even if the central bank’s digital currency initiative succeeds, there is no guarantee that the Reserve Bank of Australia will continue to use the platform. Ethereum is used by central banks here because it is practical.
The RBA does not explicitly say it will issue a CBDC in its document, but said it is seeking input from industry participants to “add to the ongoing investigation.” The experiment is expected to be completed by early next year, with the results announced in mid-2023, according to the documents.
Former Ripple executive Dilip Rao is now the project’s program director. Rao once helped the banking and financial sector adopt his XRPL on his Ripple. He believes CBDC could use his XRPL-based real-time payment system. Although eAUD is built on the permissioned private Ethereum network, the potential for XRPL use cases may increase in the future.