The RBA (Reserve Bank of Australia) and the DFCRC (Digital Finance Cooperative Research Centre), an Australian financial research institute, have announced in a joint statement that they would launch a CBDC “live pilot” soon.
Australia’s RBA Partner With DFCRC On CBDC Pilot Project
The RBA stated that it was working with the DFCRC on a research project to examine the economic benefits and potential use cases of a CBDC in Australia. As part of the project’s initial phase, the RBA plans to choose multiple financial industry participants to showcase potential applications of the CBDC.
Meanwhile, the pilot project will begin and end on March 31st and May 31st, respectively. However, the central bank will publish a final report highlighting the findings and evaluation of the various use cases on June 30th.
The pilot project will test various use cases, including tax automation, offline payments, and a CBDC designed for “trusted Web3 commerce.” Participants in the trial include banks like Commonwealth Bank and Australia and New Zealand (ANZ) banks and payment providers such as Mastercard.
According to Brad Jones, the RBA’s assistant governor for financial systems, the pilot project and research study will serve two purposes simultaneously. Firstly, it will offer valuable learning opportunities for the industry. Secondly, it will help policymakers comprehend the potential benefits of a CBDC for the Australian economy and financial system.
In addition, CANVAS, a blockchain company and one of the selected trial participants, will investigate the advantages of employing a CBDC in tokenized FX transactions.
CBDCs To Revolutionize The Traditional Financial System
David Lavecky, the CEO of CANVAS, pointed out that remittance and FX markets are massive, with daily trades worth trillions of dollars. However, he notes that these markets operate on outdated, slow, and inefficient systems.
The CEO believes that digital currencies and CBDCs could expedite currency movement and reduce costs compared to legacy systems while enabling these markets to operate beyond regular business hours.
Although some people are opposed to CBDCs due to privacy concerns, Lavecky acknowledges that privacy would be one of the aspects taken into account. However, he emphasizes that the primary goal of this project is to explore potential use cases and determine whether issuing a CBDC would be advantageous.
Meanwhile, Eli Ben-Sasson, the President of StarkWare, a blockchain scaling technology company that offers zero-knowledge rollup engine StarkEx, opines that the pilot program is a significant move toward integrating blockchain technology into conventional finance.
He also stated that demonstrating real-world use cases for digital currencies is crucial to dispelling the notion that they are nothing more than empty hype. However, he acknowledges that determining the most effective approach to achieving this goal remains challenging.
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