According to an announcement from The Reserve Bank of Australia will be partnering with the Commonwealth Bank, National Australia Bank, the financial services company Perpetual, and software company ConsenSys on a project to explore the potential use of a wholesale central bank digital currency (CBDC) in the country using “Ethereum-based distributed ledger technology.” The central bank revealed that they would be researching the development of a proof-of-concept for “the issuance of a tokenized form of CBDC.
The central bank aims to explore CBDC’s implications in wholesale financial market transactions.
The Reserve Bank of Australia mentioned wholesale market participants potentially using the digital currency for tokenized syndicated loans on a DLT platform and exploring the implications of delivery-versus-payment security settlements with cross-chain atomic swaps. Reserve Bank of Australia Assistant Governor Michele Bullock stated that with this project, they aim to explore the implications of a CBDC for efficiency, risk management, and innovation in wholesale financial market transactions.
He further added that while the case for the use of a CBDC in these markets remains an open question, the central bank is pleased to collaborate with industry partners to explore if there is a future role for a wholesale CBDC in the Australian payments system.
Central banks continue to explore CBDCs.
Central banks across countries are experimenting with national digital currencies. Earlier, the U.S. Federal Reserve chairman, Jerome Powell, suggested the United States was waiting to get the right proposals in place, rather than becoming the first to launch in regard with a digital currency. Several other major central banks, including the Bank of Japan, the Philippines’ central bank, are working on a CBDC. As reported earlier, the Caribbean island Bahamas became the first nation to launch its central bank-backed digital currency.