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Reserve Bank of Australia reveals the approved use cases for its CBDC pilot

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(Kitco News) - The Reserve Bank of Australia (RBA) has published a report outlining the use case proposals and the respective providers that it has selected to take part in its ongoing exploration of an Australian central bank digital currency (CBDC).

“Today we are announcing the use case proposals, along with their providers, which have been invited to participate in the live pilot, which will take place over the coming months,” the RBA said in the press release.

The CBDC research project launched in September as a joint collaboration between the RBA and the Digital Finance Cooperative Research Centre (DFCRC) with the goal of demonstrating the capabilities of an eAUD in terms of cost, speed, and quality of outcome.

This latest report is a follow-up to the September launch, which called on industry participants to submit proposals for potential applications of the eAUD that the RBA could review and select from.

“The project received a large number of use case submissions from a range of industry participants,” the RBA wrote. “A range of criteria was considered in selecting the use cases to participate in the pilot, including the potential to provide insights into the possible benefits of a CBDC.”

A total of 14 use cases were selected by the central bank – including offline payments, tokenized FX settlement, construction payments, and corporate bond settlement – and the providers chosen to pilot these use cases range from small fintech firms like to large financial institutions such as ANZ and Mastercard.

Selected use cases and their providers. Source: RBA

“We are delighted with the enthusiastic engagement by industry in this important research project,” said Brad Jones, Assistant Governor (Financial System) at the RBA. “It has also been encouraging that the use case providers that have been invited to participate in the pilot span a wide range of entities in the Australian financial system, from smaller fintechs to large financial institutions.”

Jones went on to note that the research study is focused on contributing to the hands-on learning process by industry participants and will enhance policymakers’ understanding of how a CBDC could potentially benefit the Australian financial system.

According to Dilip Rao, CBDC Program Director with the DFCRC, “The process of validating use cases with industry participants and regulators will inform further research into design considerations for a CBDC that could potentially play a role in a tokenized economy.”

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Australia is just one of more than 114 countries currently in some phase of exploring the creation of a CBDC. Japan is set to launch its digital yen pilot program beginning in April, which also happens to be the start date for Russia’s CBDC pilot program. Russia is also currently exploring the use of a digital rouble to conduct mutual settlements with China.

Private companies are also getting in on the CBDC action, including Ripple Labs, which is currently working with more than 20 central banks regarding the development of a CBDC, including already announced projects with Bhutan and Palau.

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