The Reserve Bank of Australia is currently investigating use cases for CBDC, which will be deployed on an Ethereum-based distributed ledger technology (DLT) platform. Their findings will be published in a public report to be published mid this year.
As China continues to pilot trials for its digital Yuan and the Bank of England is working on the feasibility of a CBDC, the future of the currency is likely to take a digital turn. Japan and India are two other big countries interested in this technology. The USA has not announced any research on the subject yet.
The Reserve Bank of Australia partnered with CBA, NAB and ConsenSys to develop the project. According to the Australian website itnews, among the use cases of CBDC are “the creation and provision of token loans”.
Chris Thompson, vice president of the payments policy department, said:
The project is currently underway and we are planning to complete it very soon. Hopefully, we plan to publish a public report on the project in the middle of the year.
NAB director Lisa Wade said:
“We are very interested in how blockchain can help us in markets with many inefficiencies,” he said.
We wanted to start with a syndicated loan because these are high-value, low-volume transactions and there are a lot of repetitive processes in the ecosystem, a lot of error or potential for errors, and a lot of operational risks.
Looking at the benefit of CBDC from a wholesale point of view, we are very interested in this project, only in these large operations and atomic placement to fix these errors and save time.
Voices from the Australian central bank are actually quite negative about the need for a digital Australian dollar.
Cash is still widely available and accepted as a means of payment
However, the bank will continue to evaluate the status of CBDC. Wade, who initially started out with a negative opinion, has definitely changed his stance since he worked on the project. She says decentralized finance is important for the future.
I believe people will only use alternative mechanisms if the central bank doesn’t start creating digital currencies.