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The collaborators that will be part of the determination of uses include ANZ, Commonwealth Bank, Mastercard and Canvas Digital.
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RBA selects partners for digital currency test
07 March 2023
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10 minute read
The RBA has selected around a dozen partners to join in its pilot scheme to examine potential use cases for a central bank digital currency (CBDC).
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Assistant governor of financial systems at the RBA, Brad Jones, said the bank was encouraged by the response with partners signed up ranging from ANZ through Mastercard to Intuit.
“We are delighted with the enthusiastic engagement by industry in this important research project,” said Mr Jones.
“It has been encouraging that the use case providers that have been invited to participate in the pilot span a wide range of entities in the Australian financial system, from smaller fintechs to large financial institutions.”
“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 policy makers’ understanding of how a CBDC could potentially benefit the Australian financial system and economy.”
The RBA's development of the CBDC has been alongside the Digital Finance Cooperative Research Centre (DFCRC), which has helped outline potential uses for digital currency.
Director of the central bank digital currency program at DFCRC Dilip Rao said the 14 case uses explored would provide great insight into its potential.
“The variety of use cases proposed covers a range of problems that could potentially be addressed by CBDC, including some that involve the use of CBDC for atomic settlement of transactions in tokenised assets,” he said.
“The process of validating use cases with industry participants and regulators will inform further research into design considerations for a CBDC that could potentially play a role in a tokenised economy.”
The RBA said ANZ and the Commonwealth Bank would be the leads for the exploration into use cases such as offline payments, GST automation and nature-based asset trading.
The full list of use cases and the collaborators exploring them were:
- Offline payments - ANZ
- Nature-based asset trading - ANZ and Commonwealth Bank
- SuperStream payments - ANZ and Oban
- Corporate bond settlement - Australian Bond Exchange
- Tokenised FX settlement - Canvas Digital
- GST Automation - Commonwealth Bank and Intuit
- CBDC custodial models - Digi.cash
- Livestock auction - Fame Capital
- High-quality liquid assets securities trading - Imperium Markets
- Interoperable CBDC for trusted Web3 commerce - Mastercard and CUscal
- Funds custody - Monoova
- Construction payments - NotCentralised
- Tokenised bills - Unizon
- CBDC distribution - ANZ
Leading the investigation into the use of CBDCs for tokenised foreign exchange, Canvas digital, said it was privileged to be a part of the program and would seek to demonstrate the possibilities of trading an Australian dollar CBDC for a US dollar stablecoin (USDC).
Canvas co-founder and CEO David Lavecky said CBDC had the potential to reinvent the foreign exchange market by removing inefficiencies and settlement risks.
“The potential markets for CBDCs in foreign exchange trading and international remittances are significant,” said Mr Lavecky.
“CBDC and digital currencies like USDC in FX trading and remittances can potentially enable frictionless, 24x7x365 trading and global movement of foreign currencies.”
“The solution has the potential to dramatically increase speed and reduce the risks and costs compared to traditional foreign exchange trading and remittance networks.”
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