Sunday, April 14, 2024

Australia’s central bank to trial CBDC.

The Reserve Bank of Australia, as part of a research project, is set to trial its own digital currency to evaluate the future of central bank digital currencies (CBDC) in the country. The central bank has partnered with the Digital Finance Cooperative Research Centre (DFCRC) for this project. It will focus on the uses for, and potential economic benefits of a CBDC.

The project will be completed in about a year. It will involve the development of a limited-scale CBDC pilot that will operate in a ring-fenced environment for a period of time. The RBA will invite interested industry participants to develop specific use cases that demonstrate how a CBDC could be used to provide innovative and value-added payment and settlement services to households and businesses.

Michelle Bullock, the RBA deputy governor, described the project as an important step on the path to a potential Australian CBDC. She said it’s an experiment and pointed out that other countries have done pilots where they have looked at the sort of things they need to do. Bullock outlined the difference saying that it’s a real claim on the Reserve Bank, a real-life experiment that allows companies or businesses that have business ideas to actually come and use the claims on the Reserve Bank to see how it would work in practice. The deputy governor said that while the claims on the Reserve Bank would be real, they would be kept within a closed loop.

Bullock explained that they would purchase digital currency from the Reserve Bank and it would be a claim on the Reserve Bank. But it would only be used within the closed-loop system of the particular business case they are putting up. She said it’s backed by the Reserve Bank in the sense that if a particular business has bought some of the digital currency from the RBA for the purposes of the experiment, they will sell it back to the bank and get their money back.

Andreas Furche, the chief executive of DFCRC, said doubts around CBDCs are centered on how useful they could actually be, and in what ways. He argued that CBDC is no longer a question of technological feasibility. It’s about what economic benefits a CBDC could enable, and how it could be designed to maximize those benefits.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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