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- The Australian research project with ConsenSys will explore the launch of CBDC on the Ethereum-based DLT (ETH) platform.
- The CBDC research project on Ethereum for the Australian central bank is expected to be completed by the end of 2020.
In a press release, the Reserve Bank of Australia (RBA) announces a collaboration with Commonwealth Bank, Perpetual, and business firm Ethereum ConsenSys, among other partners. The purpose of the cooperation will be to launch a research project for a possible implementation of a CBDC on an Ethereum-based distributed general ledger (DLT) platform.
Among other things, the investigation should provide information on the implications, uses and benefits of issuing a digital currency issued by Australia’s central bank (CBDC). Therefore, the partners will develop a Proof of Concept (POC) on the minting of a tokenized CBDC. The digital currency should be able to be used as a medium of exchange in a wholesale market for “financing, settlement and repayment of a syndicated tokenized loan” that will operate on the Ethereum-based platform.
Australia Joins CBDC Race With Ethereum (ETH)
In addition to the above, the POC will report on the use of CBDC to make atomic deliveries versus payment arrangements on the Ethereum-based platform. The Australian Central Bank has also requested that information be provided on other potential use cases and other features that could be applied with a tokenized CBDC. RBA Deputy Governor Michele Bullock said:
With this project we intend to explore the implications of a CBDC for efficiency, risk management and innovation in wholesale financial market transactions. While the case of using a CBDC in these markets remains an open question, we are delighted to work with industry partners to explore whether there is a future role for a wholesale CBDC in the Australian payments system.
The bank has historically taken a stand against issuing a CBDC. In 2017, the president of Australia’s leading banking institution said that a CBDC would not be launched. This position was confirmed in the latest RBA report on the efficiency of means of payment in the country.
According to the statement, the project is expected to be completed by the end of this year. A report on its findings and discovery will then be published in the first half of 2021. As reported by the CNF, ConsenSys played a central role in the development of CBDCs.
Last week it was announced that the company is part of the Bank of Thailand’s project to develop a Proof of Concept on an Ethereum-based platform. The initiative is similar to that proposed by the RBA but will be based on the experience of the Siam Cement Group and Digital Ventures partners in the development of blockchain payment solutions.
With the seemingly imminent launch of the digital yuan, countries in the Asian giant’s orbit appear to be stepping up their efforts to develop CBDC. Financial authorities in these countries are likely to be considering the disadvantages of relying on a currency controlled only by China to continue their business relationships.
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