The Reserve Bank of Australia (RBA) is working with the Digital Finance Cooperative Research Centre (DFCRC) to explore use cases for a central bank digital currency (CBDC) in the country.
The DFCRC is a digital asset research programme funded by the financial services industry, including the RBA, universities and the Australian government and treasury.
RBA deputy governor Michele Bullock says the project is an opportunity to engage with “a wide range of industry participants” to better understand the potential benefits a CBDC could bring to Australia.
While much research has been focused on the technical feasibility of a CBDC, less attention has been given to the use cases and potential economic benefits of a digital currency.
The RBA and DFCRC research project, which is expected to take a year, is designed to explore this aspect of an Aussie CBDC as well as unexplored technological, legal and regulatory considerations.
DFCRC CEO Andreas Furche says: “CBDC is no longer a question of technological feasibility. The key research questions now are what economic benefits a CBDC could enable, and how it could be designed to maximise those benefits.”
Companies will be asked to develop use cases that demonstrate how a CBDC could provide value-added payment and settlement services to households and businesses.
The research project will develop a limited-scale CBDC pilot that will operate in a ring-fenced environment “for a period of time”, the bank says, followed by a report at its conclusion outlining the findings.
Australia is one of a long list of countries exploring the use of CBDCs. The UK is set to launch a pilot next month exploring the use of a retail central bank digital currency, the dSterling.
Earlier this year, the European Central Bank appointed Evelien Witlox from ING to head its digital euro project.
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