Canvas Uses Australian CBDC To Execute A Foreign Exchange Transaction

Worldwide finance is continuously evolving in the digital space. Simultaneously, the latest crypto products are witnessing a great rise along with considerable advancement in the central bank digital currencies (CBDC). The top of CBDCs is currently being discussed on a broad level. Australia is considered among the new nations that are attempting to leverage the hype created by digital currencies.

Canvas Utilizes Australian eAUD to Execute Its Early FX Transfer

Australia’s strategy to introduce a central bank digital currency (CBDC) has touched a prominent landmark. At present, Canvas (a blockchain venture operating within Australia) has announced that the platform has effectively utilized the CBDC of the country to execute a foreign exchange (FX) transfer.

On the 18th of this month, CANVAS declared that the company has remained successful in its endeavour to perform the initial foreign exchange transfer with the use of an Australian CBDC. The global fintech firm shared the respective news on its official website in a recently published press statement. The transfer’s execution was carried out as included in a list of pilot projects.

The respective projects were initiated by the Reserve Bank of Australia (the central bank of Australia) and the Digital Finance Cooperative Research Centre (DFCRC) for the launch of a CBDC, “the eAUD.” The landmark development took place for trading eAUD in exchange for the stablecoin USDC. The transaction was carried out on the 17th of May.

The execution of the trade was done on the Connect platform of Canvas. Connect platform is developed on Ethereum. The fintech firm asserts that the platform will offer cost-effective, rapid, scalability, and confidential transfers. In addition to this, the blockchain company promises to take benefit from the L2-based zero-knowledge (ZK) technology to enhance the present foreign exchange system.

At present, the FX system is experiencing several deficiencies, taking into account the inability to run 24/7 during the whole year, costly transfers, as well as inclination to have several errors. Nonetheless, the recent exploit at Canvas indicates the benefit to be brought by the CBDC of the RBA to conventional financial institutions, markets, cross-border payments, and so on.

As per Canvas Digital’s CEO David Lavecky, the CBDC eAUD can resolve the relevant problems in the international remittance marketplaces and foreign exchange by enhancing transfer times, eradicating marketing disorganization, decreasing charges, and much more. Canvas is the sole among the fifteen chosen use case-providing entities within the eAUD project of the RBA.

Central Banks Around the World Attempt to Minimize Transfer Charges and Provide Convenience in Cross-Chain Transactions

The rest of the entities involved in this project take into account MasterCard, Inuit, The Commonwealth Bank of Australia, and ANZ BANK, along with some others. Central banking organizations are experimenting with central bank digital currencies (CBDCs) with the use of both retail and wholesale digital currencies. This is chiefly to enhance their native economies as well as to bring convenience in payments across borders.

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