Australia to conduct a CBDC pilot in early 2023
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(Kitco News) - The Reserve Bank of Australia (RBA) has published a white paper outlining its plan for conducting a pilot project for its central bank digital currency (CBDC), the eAUD. The goal of the pilot is to demonstrate the capabilities of the digital currency in terms of cost, speed, and quality of outcome.
The white paper and pilot program arose out of a joint collaboration between the RBA and the Digital Finance Cooperative Research Centre (DFCRC), which was originally announced on Aug. 9.
According to the ‘Australian CBDC Pilot for Digital Finance Innovation’ white paper, “The key objectives of the project are to identify and understand innovative business models, use cases, benefits, risks, and operational models for a CBDC in Australia.”
Based on the structure laid out in the missive, the RBA will be responsible for the issuance of the eAUD, while the DFCRC will oversee the development and installation of the eAUD platform.
The platform that the DFCRC has been tasked with developing will be a private, permissioned Ethereum (Quorum) implementation. The eAUD ledger will operate as a centralized platform, under the management and oversight of the RBA.
Some of the potential uses for the eAUD outlined in the paper include; the atomic settlement of transactions involving tokenized assets; multi-party or syndicated transactions; escrowed transactions; enabling conditional or programmable transactions; as a verifiable reserve asset to reduce counterparty risks; and for 24/7 operations.
Industry participants have been asked to submit any use case ideas for the eAUD, and “a limited number of these use cases will be selected for operation within the CBDC pilot project infrastructure.”
Invitations will be required to participate in the trial, and only Australian-registered entities and Australian residents who pass KYC measures will be allowed to take part in the trial and hold eAUD.
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The amount of eAUD to be issued for the pilot will be determined by the RBA based on the requirements of the chosen use case providers, and no interest will be paid by the RBA on any holdings of eAUD.
The deadline for use case submissions is Oct. 31, and the chosen projects will be announced in December. The actual pilot for the selected projects is scheduled to occur between January and April 2023. Once completed, a report detailing the findings is expected to be published in mid-2023.
With this announcement, Australia has now joined a growing list of countries from around the world – including China, Thailand, the Philippines, Jamaica and Sweden – that have or are planning to have CBDC pilots launched within the next year.