Australia’s Central Bank Advances Wholesale Digital Currency Project
The Reserve Bank of Australia (RBA) announced on Thursday a significant step forward in its exploration of a wholesale central bank digital currency (CBDC). Through “Project Acacia,” the RBA will collaborate with various industry partners to conduct trials using real money and assets for the first time.
The initiative will test 19 pilot cases involving actual money and assets, alongside five proof-of-concept scenarios using simulated transactions. These trials will encompass a diverse range of asset classes, including fixed income, private markets, trade receivables, and carbon credits. The proposed settlement assets include CBDCs, stablecoins, and bank deposit tokens, as well as novel ways of utilizing commercial banks’ existing deposits held at the RBA.
The project will utilize various blockchain platforms, such as Hedera, Redbelly, R3 Corda, and Canvas Connect. Testing is set to occur over the next six months, with a report expected in the first half of next year.
Brad Jones, an RBA Assistant Governor overseeing the financial system, stated that the chosen use cases will help the bank better understand how innovations in central bank and private digital money, alongside payment infrastructure, could enhance the functioning of Australia’s wholesale financial markets. The RBA is focusing on wholesale applications for a digital currency, having previously determined there was no economic benefit in an official retail cryptocurrency.
According to the RBA, a wholesale CBDC offers several potential benefits, including reducing counterparty and operational risks, freeing up collateral, improving transparency and auditability, and lowering costs for both institutions and customers.
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