The Reserve Bank of Australia (RBA) recently announced they have partnered with several financial institutions to research the potential of distributed ledger technology for a CBDC.
Based on the announcement, the partnering financial institutions include software firm ConsenSys, financial services company Perpetual, National Australia Bank, and the Commonwealth Bank.
The financial institutions will research the benefits of using distributed ledger technology on central bank wholesale digital currencies.
The RBA also said the partnering group would be investigating the development of a proof of concept when issuing tokenized CBDC’s.
Partnership on wholesale market participation
The collaboration will be focused on a wholesale market participant who might be utilizing the digital currency for tokenized syndicate loans via a DLT platform. They will also investigate the effect of security settlements between payments and delivery using cross-chain atomic swaps.
According to Deputy Governor of the Reserve Bank of Australia, Michele Bullock, the project will seek to determine the impact of CBDC on innovation, risk management, and efficiency in financial market transactions. Findings may point to how CBDCs will be handled in the future within the Australian financial market.
He also stressed the need to work with industry partners to explore the market to achieve the same goals. He pointed out,
“While the use of a CBDC is still open in these markets, we look forward to working with industry partners.”
The project will be exploring various areas to place a future role for CBDCs in the Australian financial market.
Australia making a U-turn to support CBDC
This project may signify the Australian’s financial authority to pursue more interest in CBDCs. The country’s reserve bank has set various policies that seem to be working against the growth of CBDC in the country. However, the recent partnership to get more involved in CBDC research shows the bank’s willingness to keep things open to CBDCs.
Earlier last month, RBA announced that it would continue to deploy resources towards the research on CBDC, even though the financial institution insists the country has no basis for issuing one in September.
The bank has also pointed to the success of the country’s effective real-time platform for new payments, which has been considered an alternative to issuing a CBDC.
The bank has also revealed that it is set to offer fiat banknotes access if Australians still show the same interest in using them.
The results of the research to be published next year.
The Reserve bank will publish the report next year, once the project has concluded, according to the report on the development.
The RBA also revealed that the partnership might result in other potential automation and programmable financial assets features. Bullock added that the RBA would enable the research team to carry out their exploration. The result of the research is expected to be published during the first half of next year.
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