:format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/3NILDF3QGZDP5NSSWK7V3PKSBI.jpg)
The Reserve Bank of Australia has revealed a set of projects that will develop use cases for a digital dollar, the eAUD, during its testing phase, currently underway.
The projects will look at use cases ranging from offline payments to bond settlement to securities trading, among others, the Australian central bank announced on Thursday morning local time.
In a statement, RBA Assistant Governor Brad Jones said the participants in the pilot projects include a wide array of industry representatives, from “smaller fintechs to large financial institutions.”
“The pilot and broader research study that will be conducted in parallel will serve two ends – it will contribute to hands-on learning by industry, and it will add to policy makers’ understanding of how a CBDC could potentially benefit the Australian financial system and economy,” he said.
Australia’s central bank is looking to complete its central bank digital currency pilot – which kicked off last August – by mid-2023.
The RBA’s partners for the pilot projects include the Australia and New Zealand Banking Group Limited (ANZ), Mastercard, Monoova, the Australian Bond Exchange, DigiCash, Commonwealth Bank and others.
Some of these projects will address issues like conducting offline transactions using a CBDC. A project description suggests smart cards preloaded with funds could enable offline payments, though it will focus on a “consumer-to-merchant” scenario.
Another project will look at using the dollar-pegged USDC stablecoin to streamline foreign exchange trades and remittances. The project will test whether international remittances can be 24/7/365 while reducing counterparty risk.
The RBA’s digital dollar experiment is one of many such initiatives by central banks around the world. A CBDC not only represents the transition to a more digital economy, but also a safer alternative to private cryptocurrencies that may even leverage their underlying technologies.
