Australia's central bank digital currency pilot achieves offline payments, but mass adoption faces hurdles due to card reluctance in emergencies.
The deputy governor of the Reserve Bank of Australia dismissed “speculative cryptocurrencies” and risky stablecoins but said tokenized deposits could unlock $11 billion in annual savings.
Mastercard demonstrated how a digital Australian dollar can be “wrapped” and deployed on various public blockchains, competing with existing stablecoins.
The Reserve Bank of Australia kicked off a research project into the viability of a CBDC in 2022 and says bank-issued stablecoins and tokenized deposits could do a good job.
Blockchain infrastructure provider Canvas broke the news on May 17, noting that two digital asset fund managers, DigitalX and TAF Capital, broke down the transaction.
The latest development now allows the trading of tokens on publicly distributed ledgers in real-time, which was made possible by utilizing smart contracts.
Australia and New Zealand (ANZ) bank and the Commonwealth Bank will handle nature-based asset trading of the CBDC pilot, while the Australian Bond Exchange will handle corporate bond settlements.
RBA's Brad Jones said while CBDCs present an array of use cases that could promote financial stability, they also exhibit risks in the monetary system, such as impeding the ability of central banks.
Preparations are up for Australia's CBDC pilot initiative, with the release of a white paper rallying the industry to explore use-cases of digital fiat and how it can transform the finance sector.
The Reserve Bank of Australia is looking to press ahead with its CBDC adoption plan; however, it is eyeing to limit it to wholesale transactions as it further studies use cases of digital assets.
The Reserve Bank of Australia said the project would essentially evaluate the economic benefits and risks of launching a central bank digital currency in the country.