CBDCs are on the rise all over the world, and Australia doesn’t want to fall back. The government and important financial organizations are trying their best to develop a central bank digital currency to compete with other nations like China. The recent announcement from the Reserve Bank of Australia confirms that they are working with multiple companies to expand the research in this field.
The latest announcement from the Reserve Bank of Australia says the bank is working with Commonwealth Bank, National Australia Bank, Perpetual, and ConsenSys Software on a research project about CBDC. Regardless of the results, it shows a compelling interest in the Australian government to find an innovative solution regarding the currency.
Reserve Bank of Australia says the new partnership focuses on researching the potential use and implications of a wholesale form of central bank digital currency (CBDC) using distributed ledger technology (DLT). The latest partnership is not the only mission in Reserve Bank about CBDC. They have been testing and studying digital currencies for a considerable time.
Consensys will the software partner in the new project that helps the Reserve Bank find out more about blockchain infrastructures and their features for developing a national digital currency. According to the bank:
“The project will involve the development of a proof-of-concept (POC) for the issuance of a tokenised form of CBDC that can be used by wholesale market participants for the funding, settlement, and repayment of a tokenised syndicated loan on an Ethereum-based DLT platform.”
After the partners develop the POC, they will use it to explore the pros and cons of a concept called “atomic” delivery-versus-payment settlement. Doing business on the DLT platform and automation features of tokenized payments will be tested, too. After all, Australian execs are looking for innovative ways to ease and improve the security of payment processes in the wholesale markets.
Blockchain solutions have always promised improved efficiency and security, especially in financial use-cases. Australian bank wants to test these promises in the latest partnership with Consensys. Assistant Governor of Reserve Bank of Australia (Financial System) Michele Bullock said:
“With this project, we are aiming to explore the implications of a CBDC for efficiency, risk management and innovation in wholesale financial market transactions. While the case for the use of a CBDC in these markets remains an open question, we are pleased to be collaborating with industry partners to explore if there is a future role for a wholesale CBDC in the Australian payments system.”
The research project will be completed by the end of 2020. The partners will publish the results in the first half of 2021.
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