Australian central bank launches project to explore CBDC use cases
The Reserve Financial institution of Australia (RBA) is seeking to set up use instances for a central financial institution digital foreign money (CBDC) and decide the financial advantages it will possibly have via a brand new research project over the approaching months.
The challenge will likely be performed in collaboration with the Digital Finance Cooperative Analysis Centre (DFCRC) and contain a number of Australia-based banks. It should additionally contain the usage of the Ethereum-based CBDC developed by Australia referred to as the eAUD.
RBA Assistant Director Brad Jones mentioned:
“The pilot and broader analysis research that will likely be performed in parallel will serve two ends – it should contribute to hands-on studying by business, and it’ll add to coverage makers’ understanding of how a CBDC may probably profit the Australian monetary system and financial system.”
CBDC use instances
The regulator mentioned that it obtained a 140 complete use case submissions and made the ultimate choice based mostly on quite a lot of components — together with their “potential to offer insights into the potential advantages of CBDCs”
The challenge intends to investigate 14 use cases for CBDCs. Banks will function “use case suppliers” for the completely different use instances.
The challenge contains pilots that can discover CBDC distribution; offline funds through CBDCs; cross border settlement and custody; GST automation; tokenized payments and; in addition to pilots for livestock auctions, building provide chain funds and superstream funds, amongst just a few others.
The DFCRC mentioned that customers are more and more taking part in web3 commerce throughout a number of public blockchains and are compelled to make use of non-public cryptocurrencies, which have myriad dangers related to them in comparison with a central bank-backed foreign money.
One of many pilots within the challenge goals to develop a “trusted and reliable form of money” on the blockchain. It should discover how a CBDC might be tokenized on a number of blockchains, in addition to how to make sure that solely approved events can maintain and redeem it. Licensed events could be entities which can be correctly KYC’d and risk-assessed by licensed CBDC service suppliers.
Mastercard will function the “use-case supplier” for the interoperability pilot.