Reserve Bank of Australia Planning To Launch ‘Live CBDC Pilot’

The central bank of Australia is set to launch a “live pilot” of a central bank digital currency “in the coming months,” as per a joint statement from the Reserve Bank of Australia and the Digital Finance Cooperative Research Centre, an Australian financial research institute.

The Reserve Bank of Australia mentioned that the commencing stage of the research project involves the selection of various financial industry participants to exhibit potential use cases of the central bank digital currency.

The trial project will start on 31st March and finish on 31st May, with a final report on the findings, including an assessment of the several use cases developed, set to be published on 30th June.

David Lavecky, the co-founder and chief executive officer of blockchain firm CANVAS, one of the companies selected as a trial participant mentioned that they were selected to explore the potential advantages of using a central bank digital currency in the context of tokenized FX transactions.

Lavecky notes that forex and remittance markets are huge, with trillions of dollars traded daily. He added,

“And the surprising part is that it moves on very legacy rails at this slow speed. For example, when you’re sending money to New Zealand from Australia, the cut-off was like 1 or 2 pm. So a lot of that friction and capability gets put away when you start moving into digital currencies and CBDCs.”

He further mentioned,

“There’s been no decision made about whether a CBDC would be issued and what technology it would use; this is very much just research around capabilities and what’s possible really. So understanding that privacy is a concern, that’s something there can be solutions put forward to, as part of the pilot.”

The co-founder and President of blockchain scaling technology firm StarkWare, Eli Ben-Sasson, sees the pilot program as a key part in the journey to incorporate blockchain into conventional finance.