As central banks worldwide intensify efforts to explore the benefits and issue a central bank digital coin (CBDC) in respective countries, the Reserve Bank of Australia (RBA) has declared that the nation is not yet prepared to issue its own CBDC. According to the RBA, Australia is “years away” from such an endeavour.
In a report titled “Australian CBDC Pilot for Digital Finance Innovation,” released on August 23, 2023, the RBA revealed the findings of its collaborative effort with the Digital Finance Cooperative Research Centre (DFCRC) to assess the potential benefits of a CBDC in enhancing the nation’s payments system.
While the report acknowledged the potential advantages of adopting a CBDC, it also underscored the presence of legal, regulatory, technical, and operational complexities that necessitate further investigation.
In particular, the report emphasized the need for an in-depth analysis of the legal framework underpinning a CBDC, including the legal basis on which one could be issued and its legal status. This includes examining the legal foundations for its issuance and determining its legal status. It also highlighted potential challenges associated with the integration of use case applications with a CBDC platform, including ensuring the efficiency and integrity of atomic settlements and programmability across networks.
During the research project, the RBA issued a pilot CBDC and enlisted various industry participants to test its functionality for various transactions. The program ran from March to July 2023. It involved 16 unique use cases, such as asset tokenization, with participants including the Commonwealth Bank of Australia, National Australia Bank, Perpetual, and ConsenSys Software.
Brad Jones, RBA’s Assistant Governor for Financial Systems, noted the significance of the project’s findings in guiding the RBA’s future research projects. He stated:
“The key findings from the project will help to shape the next phase of the RBA’s research program into the future of money in Australia. Alongside our ongoing work on cross-border payments, this will include deepening our understanding of the role that tokenised asset markets and programmable payments could have in the Australian economy.“
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