The Reserve Bank of Australia (RBA), which went on record in September stating that there is no need for Australia to develop a digital AUD, announced that it is working with other banks and partners to develop a wholesale central bank digital currency (CBDC) based on distributed ledger technology (DLT). The partnership includes Commonwealth Bank, National Australia Bank, and blockchain tech firm Perpetual and Consensys Software.
‘With this project we are aiming to explore the implications of a CBDC for efficiency, risk management and innovation in wholesale financial market transactions. While the case for the use of a CBDC in these markets remains an open question, we are pleased to be collaborating with industry partners to explore if there is a future role for a wholesale CBDC in the Australian payments system,” said RBA’s assistant governor Michele Bullock.
The RBA intends to conceptualize and design a proof-of-concept for tokenized CBDC distribution and issuance in managing tokenized syndicated loans on a DTL platform which will be executed on the Ethereum network. Other focus areas include delivery-vs-payment settlement, and other automation and programmability features that will work not only for the CBDC but other financial assets in the future as well.
This project is slated for completion at the end of the year, with findings on the report scheduled for an early next year release.
Previously, the RBA stated that there is no foreseeable need for CBDCs despite the use of physical cash dwindling in recent years. The bank believes that cash will not lose its dominance, and that its duty is to ensure monetary and financial stability.
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