Reserve Bank of Australia to launch CBDC live pilot project
- The CBDC pilot project will start on March 31 and end on May. 31.
- RBA is partnering with firms, including Australia and New Zealand Banking Group Limited, Mastercard, Monoova, and DigiCash, for the project
The Reserve Bank of Australia is all set to launch a live pilot of CBDC-central bank digital currency soon. According to RBA’s latest statement, CBDC will be launched in collaboration with the Digital Finance Cooperative Research Centre (DFCRC) to explore its potential use cases and economic benefits.
The CBDC pilot project will start on March 31 and end on May. 31. As per RBA and DFCRC’s joint statement, a final report on the pilot project’s findings, which includes an assessment of the various use cases developed, will be published on June 30. Fourteen use cases have now been selected for the live pilot.
The CBDC project will involve “selected industry participants demonstrating potential use cases for a CBDC using a limited-scale pilot CBDC that is a real digital claim on the Reserve Bank,’.
Australia’s central bank is partnering with firms, including Australia and New Zealand Banking Group Limited, Mastercard, Monoova, the Australian Bond Exchange, DigiCash, Commonwealth Bank, among others, for the project.
Commenting on the potential of the project, Brad Jones, assistant governor for financial systems at the RBA, stated, “The pilot and broader research study that will be conducted in parallel will serve two ends – it will contribute to hands-on learning by industry, and it will add to policymakers’ understanding of how a CBDC could potentially benefit the Australian financial system and economy.”
Interest in CBDC has been spiking in Australia in recent months. In December 2022, RBA revealed that the CBDC pilot program had received more than 140 use case proposals from the finance industry. The RBA’s Australian dollar eAUD CBDC trial released on August 9 has seen over 80 financial entities proposing use cases.
Despite the impressive numbers, Brad Jones had restressed CBDC’s negative impact on normal banks’ functioning. On December 8, at a central bank conference, Jones commented that a retail CBDC could result in people avoiding commercial banks entirely and potentially displacing the Australian dollar. He added that banks could face liquidity issues if CBDC becomes the preferred source of holdings.
Apart from RBA, several other central banks worldwide are now developing a keen interest in digital currency. In December, the Bank of Spain announced its plans to launch an experimental program to begin testing wholesale CBDC.