Australia and New Zealand Banking Group (ANZ) announced the completion of its use case in the pilot project operated by the Reserve Bank of Australia (RBA), focusing on the central bank digital currency (CBDC).
The commercial bank’s use case was focused on trading carbon credits which it successfully explored in conjunction with Grollo Carbon Ventures (GCV). The experiments involved tokenizing Australian Carbon Credit Units (ACCUs), allowing GCV to trade the tokens on publicly distributed ledgers with the A$DC stablecoin.
Worthy of note is the real-time nature of settlement times which ANZ noted was accomplished using smart contracts. The bank added that leveraging blockchain technology reduces instances of settlement-related counterparty risk, and the pilot CBDC proved to be a suitable backing for A$DC.
“When applied to carbon markets, tokenization has the potential to improve efficiency and transparency, reduce risk and preserve the unique characteristics of underlying projects to incentivize investment in climate solutions,” said Nigel Dobson, head of ANZ banking services.
ANZ will continue further experiments involving the RBA’s CBDC plans, with the next use case study focusing on offline payments and pension funds. Apart from the three use cases, the commercial bank has been tipped to assist the Australian central bank with the distribution of the CBDC.
RBA is also keen on exploring other CBDC use cases like livestock auctions, construction payments, tokenized bills, CBDC custodial models, GST automation, and interoperable CBDC for trusted Web3 commerce.
Australia’s CBDC pilot kicked off on March 31 and is scheduled to run until May 31, with the RBA’s Assistant Governor for Financial Systems, Brad Jones, saying that the end game is to better understand a CBDC on the broader economy.
ANZ ahead of the pack
ANZ has a ton of experience dealing with blockchain and Web3, a fact that saw the RBA grant approvals to participate in testing four use case CBDC scenarios. In 2022, the financial institution became the first Australian bank to mint a stablecoin linked to the Australian dollar.
The bank has been dabbling in tokenized carbon credits for nearly 10 months as it closed its first deal in June 2022 in collaboration between Zerocap and Victor Smorgon Group.
“We see this is evolving from being internet-protocol based to one of ‘tokenized’ protocols. We think the underlying infrastructure – efficient, secure, public blockchains – will facilitate transactions, both ones we understand today and new ones that will be more efficient,” said Dobson.
However, ANZ disclosed that it would not allow retail customers to trade digital currencies on its banking platform to protect them from associated risks.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
Watch: CBDCs and BSV
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