AUSTRALIAN CENTRAL BANK LAUNCHES PILOT PROGRAM FOR DIGITAL CURRENCIES

Tue 09 August 2022:

The Reserve Bank of Australia has announced plans to study the possible economic benefits of implementing a central bank digital currency (CBDC).

In a statement released on Tuesday, the Reserve Bank of Australia (RBA) announced that it would conduct a year-long pilot project to investigate “innovative use cases and business models” for a CBDC and better understand the relevant technological, legal, and regulatory factors.

The RBA will collaborate with the government-backed industry group Digital Finance Cooperative Research Centre (DFCRC) on the project, which will ask business leaders to create “specific use cases” that illustrate how a CBDC might offer cutting-edge payment and settlement services to consumers and companies.

The result of the pilot will inform ongoing research into the desirability and feasibility of a CBDC in Australia, the RBA said.

“This project is an important next step in our research on CBDC,” RBA Deputy Governor Michele Bullock said in a statement. “ We are looking forward to engaging with a wide range of industry participants to better understand the potential benefits a CBDC could bring to Australia.”

About 100 countries are considering rolling out CBDCs, according to the International Monetary Fund, with a number of jurisdictions including China and the Bahamas already distributing their digital currencies among the public.

Advocates of CBDC claim that the emerging technology will facilitate quicker and less expensive transactions, advance financial inclusion, and provide central banks more monetary policy flexibility.

CBDCs are different from digital tokens like Bitcoin since they are governed by a central organization, although having some similarities with cryptocurrencies.

Blockchains, which are peer-to-peer networks used by cryptocurrencies, are decentralized so that no one entity or organization has authority over them.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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