Australia’s CBDC research to include 1-year ‘limited scale’ pilot for digital currency

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The Reserve Bank of Australia (RBA) has partnered with the Digital Finance Cooperative Research Centre (DFCRC) to launch a research project exploring new use cases for a central bank digital currency (CBDC).

In a joint media release, the RBA stated that the project would essentially evaluate the economic benefits and risks of Australia’s CBDC. The project will last about a year and feature a “limited-scale” CBDC pilot operated in a “ring-fenced environment.”

As part of the project, a limited number of participants will be allowed to use a CBDC that is a real claim on the central bank, the RBA explained. Industry players interested in developing specific use cases for the CBDC can apply to be part of the selected participants for the pilot.

At the end of the project, the RBA and government-backed industry group will publish a comprehensive report. The duo also intends to publish a paper on the objectives and approach of the project in more detail in the coming months. Meanwhile, the Australian Treasury is also participating as a member of the steering committee for the project.

In an interview with ABC News, Michele Bullock, Deputy Governor of the Reserve Bank, added that this pilot is different from others in that the CBDC is being tested for real-world use and the digital currency has claims on the RBA.

“We and other countries have done pilots where we’ve looked at the sorts of things you’d need to do. The difference this time is that because it’s a real claim on the Reserve Bank, it’s a real-life experiment, which allows companies or businesses that have business ideas to actually come and use those claims on the Reserve Bank to see how it would work in practice,” she said.

Australia optimistic about CBDC launch

The RBA has so far carried out several tests of its CBDC under development. Last year, it partnered with the central banks of South Africa, Singapore, and Malaysia, along with the Bank for International Settlements (BIS), in a project named Project Dunbar to test cross-border payments CBDC use cases.

The project concluded earlier this year and was reported to be a success. Concerning the latest pilot phase, DFCRC CEO Dr. Andreas Furche noted that launching a CBDC in Australia is no longer a question of feasibility but is now one of how its economic benefits can be maximized.

Other countries’ central banks have also been paying more attention to CBDCs. The central banks of Thailand, Indonesia, and Bangladesh have all made CBDC development announcements in the past few weeks.

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.

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