Australia’s Central bank has announced that it will partner with several financial institutions and tap into the Ethereum blockchain to create its CBDC.
According to the Reserve Bank of Australia, it will begin to look into the modalities required to create a Central Bank Digital Currency (CBDC). The bank also mentioned that it would collaborate with some financial institutions in the country to create the CBDC.
Firms like Commonwealth Bank, National Australia Bank, and ConsensSys Software will be their official partners when the project officially begins.
Australia Reserve Bank to partner with financial institutions
The creation of a Central Bank Digital Currency is no longer news, as significant countries worldwide have signaled their intention to create their state-backed digital currency. The European Union is presently talking about a decentralized digital payment system, hence the need for a digital Euro.
China has taken a step further in the official launch of its CBDC after it released 10 million worth of its digital currency to its citizens as a means of mass testing. America is making slow and steady progress as the idea to birth a digital currency has been discussed at the IMF by Jerome Powell.
With all these in mind, it looks like Australia does not want to be caught off guard, hence the rush to begin creating its digital currency. In a statement given by the Assistant Governor of the Bank, Michelle Bullock, she said this project was embarked upon to create a better life for Australians that are involved in bulk market transactions.
“With this project, we are aiming to explore the implications of a CBDC for efficiency, risk management, and innovation in wholesale market transactions,” she said. The first phase of the project is due to be completed by December, after which findings will be reported in the first quarter of 2021.
Australia ready to create more than one CBDC
According to the bank statement, the first phase of the project will involve the development of a proof of concept, which will include tokenizing the CBDC. Breaking it down, the Reserve Bank said it would be a digital form of a real and tradable asset.
The Reserve Bank wants the CBDC to be based on an Ethereum platform and will facilitate payments, repay loans, and be used for funding. As of the time of writing, the bank is yet to disclose the Ethereum based platform that the CBDC will be based on.
With this development, it looks like Australia will commit to a CBDC, but that is not the case, according to a statement from Michelle Bullock. The Assistant Governor noted that they had not found a CBDC framework that will provide all what they need.
“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,” Michelle Bullock said.
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