The Reserve Bank of Australia has released a new whitepaper that defines its approach to central bank digital currency (CBDC) a little more than a month after its pilot programme started.
The Reserve Bank’s most recent whitepaper, titled “Australian CBDC Pilot for Digital Finance Innovation,” was written in collaboration with its development partner DFCRC. It contains details related to the project’s goals, methodology, and the architecture of the pilot CBDC that will be utilised by industry participants to investigate potential CBDC.
Central banks throughout the globe are increasingly investigating the viability and technical design of CBDC, particularly the usage of distributed ledger technology(DLT).
With reasonably contemporary and very good settlement and payment systems already in place, Australia is now focusing on CBDC use cases and the potential economic advantages of implementing one.
The Reserve Bank is collaborating with the DFCRC to shift its attention to novel business models and use cases that might be enabled by the issue of a CBDC while also gaining a better understanding of some of the legal, technical, and regulatory challenges connected with doing so.
It is anticipated that the project will take about a year to complete and will result in the creation of a pilot CBDC that is a legitimate claim on the Reserve Bank and a limited-scale CBDC that will operate in a ring-fenced setting for a period of time.
The pilot will include industry partners in creating particular use cases demonstrating how a CBDC may provide value-added settlement and payment services to families and enterprises.
The Australian Treasury is a member of the project’s steering committee as part of its collaborative effort with the Reserve Bank to investigate the feasibility of a CBDC in Australia.