The Australian Government, led by Anthony Albanese, is starting to gain momentum toward digital currency. Per the most recent development, it has been learned that the Reserve Bank of Australia has unveiled a pilot program for its CBDC. It utilizes the capabilities of the Ethereum blockchain, signaling that there is a use case of the blockchain that can be explored by any nation.
Ethereum blockchain is hosting the Central Bank Digital Currency for Australia. The nation’s Central Bank has achieved this feat in association with DFCRC. It stands for Digital Finance Cooperative Research Center. Currently in the pilot phase, the Australian CBDC is seeing active participation from names like Binance, Ripple, Hedera, Stellar, and JPMorgan, among many others.
The Reserve Bank of Australia has published a research paper to highlight several objectives of undertaking the pilot project. The primary purpose is to facilitate interaction with industry participants in a transactional environment that is live for complete utilization. It has 44 pages with a core focus on features and use cases.
To start with use cases, the first on the list is enabling smarter payments. The Central Bank has emphasized the word smarter to highlight leveraging the innovative decentralized blockchain technology. Most importantly, it will greatly serve the residents of the country, who will now be able to execute cross-border transactions seamlessly. Since the digital currency is overseen by the Central Bank, it inches closer to zero volatility under the pegged mechanism in a 1:1 ratio.
Another use is to support innovation in the asset market. This pertains to the upcoming market of digital assets, popularly referred to as cryptocurrencies. It goes on to include non-fungible tokens in general; however, the focus for now is to get a grasp on crypto-economics.
Promoting innovation in private digital money features third on the list in the research paper published by the Bank. The expectation is that CBDC may play a pivotal role in promoting uniformity and interoperability of new forms of private digital money.
Inclusion in the financial ecosystem is the next use case of Australian CBDC. It pertains to reaching out to those who have not been banked till now. Also, it will serve as a resilience to the alternate payment system that people normally use.
Features include:
- Claim on the Central Bank
- Direct Control
- Programmability
- Atomic Settlement
- Transparency
It is estimated that almost half a million dollars worth of CBDC policy has been issued, and all of them have been redeemed. Bill Morgan, a Crypto Lawyer, has shared his opinion on the subject matter. Bill has stated that this is a wholesale CBDC, adding that one can analyze the research document to realize that it is a multi-CBDC shared settlement platform prototype.
A couple of limitations observed by participants were no support for smart contract deployment and no interest in holdings. Participants further reported that there was no ability to transfer the holding to a third-party or direct issuance functionality.