Reserve Bank of Australia to pilot digital currency, explores use cases – Finance Bitcoin News

Australia’s monetary authority is launching a study into the potential economic benefits of issuing a central bank digital currency. Within the project, the regulator hopes to identify use cases and intends to develop a pilot project on a limited scale.

Australia’s central bank is working on a digital currency program

The Reserve Bank of Australia (RBA) has announced the launch of a research program to study the benefits of issuing a central bank digital currency (CBDC) to the country’s economy. The project, which is expected to take about a year, will be implemented together with the Digital Finance Cooperative Research Center (DFCRC), an industry group partially funded by the Australian government.

Besides clarifying certain legal, regulatory and technological aspects, the project will also aim to identify innovative use cases of state-issued digital currency as well as business models that could be supported through CBDC, the monetary authority revealed in a statement.

According to a survey conducted by the Bank for International Settlements in 2021, the majority of central banks are exploring the feasibility of CBDCs. While acknowledging the progress made in this regard, including by exploring the potential deployment of technologies such as distributed ledgers, the RBA noted:

An issue that has received less attention thus far, especially in countries like Australia that already have relatively modern and well-functioning payment and settlement systems, is the use cases of CBDCs and the potential economic benefits of introducing one.

As part of the initiative, a limited-scale pilot project will be developed in a closed environment with a pilot CBDC that is a real claim to the Reserve Bank, the RBA also revealed, quoted by Reuters. Interested industry participants will be invited to develop solutions demonstrating how CBDC can be used to provide new payment and settlement services for both households and businesses, the authority added.

A number of use cases will be selected by RBA and DFCRC and included in the pilot project. Their assessment will be presented in a subsequent report. “The findings will contribute to ongoing research into the desirability and feasibility of CBDCs in Australia,” the bank said. The two institutions will be joined by the Australian Department of Finance, which will participate as a member of the project’s steering committee.

Reserve Bank of Australia deputy governor Michelle Bullock described the program as an important next step in the central bank’s digital currency research as the regulator seeks to better understand the potential benefits.

“CBDC is no longer a matter of technological feasibility. The key research questions now are what economic benefits CBDC can deliver and how it can be designed to maximize these benefits,” added Andreas Fourche, CEO of the DFCRC.

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Australia, Australian, bank, CBDC, CBDC, central bank, crypto, cryptocurrencies, cryptocurrency, digital currency, research, program, project, rba, research, Reserve Bank of Australia, use cases

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Lubomir Tasev

Lubomir Tasev is a tech journalist from Eastern Europe who likes the Hitchens quote: “Being a writer is what I am, not what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration .

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