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The RBA is ready to explore different usage cases for its digital currency issued by the central bank (CBDC).
The Reserve Bank of Australia (RBA) has confirmed that it is teaming up with payments company Mastercard as the testing phase of its CBDC, digital dollar – the eAUD, gets underway.
According to the Federal Republic of Germany, he will explore different cases of use of his digital currency issued by the central bank (), to include offline payments, securities trading, and the resolution of obligations, among other things. To this end, the RBA is embarking on a number of pilot projects.
statement issued Thursday morning local time, RBA Assistant Governor Brad Jones claims that the pilot projects will involve a good number of industry participants. They range from small fintechs to large financial institutions, says Jones.
Some of the partners in RBA for pilot projects include mastercard, the Australian Bond Exchange, the New Zealand Banking Group Limited (anz), monoova, Commonwealth Bank, digicash, and others.
With mastercard, for example, the RBA hopes to address offline transaction conduct through a CBDC. With this in mind, a description of the project suggests that pre-loading chip cards with funds could allow offline payments.
In the meantime, there is another project that is going to test the ability to have international remittances 24 hours a day. As part of this project, consideration will be given to using the fixed currency method to simplify foreign exchange transactions and remittances and reduce counterparty risk.
Australia Seeks to Tap the Full Potential of Its CBDC
Speaking further, Jones highlighted the focal point of the pilots and broader research study that Australia is embarking on. He said there are at least two benefits for Australia.
First, it will encourage industry-wide practical learning. It will also help decision makers better understand the advantages of a CBD for Australia's financial system and economy.
The RBA's experience with the digital dollar is one of many such initiatives in the world. Central banks are scaling up their transition efforts towards a more digital economy. More than that, they want more secure options that are close to private cryptocurrencies, which always take advantage of similar underlying technologies.
