The Reserve Bank of Australia to explore use cases for CBDC

Regulation

The Reserve Bank of Australia weighs in the central bank digital currencies (CBDCs) race to explore use cases for a CBDC in the country. It will collaborate with the Digital Finance Cooperative Research Centre (DFCRC) on a respective research project. 

As stated in an announcement from Aug. 9, the joint project of the Reserve Bank and DFCRC will focus on “innovative use cases and business models” that could be supported by the issuance of a CBDC. The technological, legal and regulatory considerations will also be assessed in the project’s course.

The pilot will last about a year and take the form of the CBDC operating in a ring-fenced environment. Industry stakeholders will be invited to develop specific use cases, which The Bank and the DFCRC will then evaluate. The selected cases will participate in the pilot, resulting in a special report.

Related: Huobi gets green light as exchange provider in Australia

The Reserve Bank intends to publish the paper with further details on the project in the next few months. As Michele Bullock, the deputy governor of the Reserve Bank, stated: 

“This project is an important next step in our research on CBDC. We are looking forward to engaging with a wide range of industry participants to better understand the potential benefits a CBDC could bring to Australia.”

The DFCRC is a $180 million research program funded by industry partners, universities and the Australian Government, which aims to bring together stakeholders in the finance industry, academia and regulatory sectors to develop the opportunities arising from the next transformation of financial markets. 

On Aug. 5, the Bank of Thailand announced the two-year pilot of retail CBDC testing, which should start by the end of 2022.