Based on the November 2, 2021, announcement published by The Reserve Bank of Australia, or RBA, the bank will be partnering with other institutions to explore CBDCs. RBA will partner with National Australia Bank, software company ConsenSys, the financial services company Perpetual, and the Commonwealth Bank. They will explore the possible use of a wholesale central bank digital currency in Australia using “Ethereum-based distributed ledger technology.”
The project will:
“explore if there is a future role for a wholesale CBDC in the Australian payments system.”
The RBA also said that it will be researching the development of a proof-of-concept for the successful issuance of a tokenized form of CBDC. It mainly mentioned wholesale market participants possibly using the virtual currency for tokenized syndicated loans on a DLT platform. It is also exploring the implications of delivery-versus-payment security settlements that involve cross-chain atomic swaps.
Michele Bullock, Reserve Bank of Australia Assistant Governor, said:
“With this project, we are aiming to explore the implications of a CBDC for efficiency, risk management, and innovation in wholesale financial market transactions. While the case for the use of a CBDC in these markets remains an open question, we are pleased to be collaborating with industry partners to explore if there is a future role for a wholesale CBDC in the Australian payments system.”
This move is part of the continuing about-face for the RBA when it comes to the CBDC policy. On October 14, the leader of payments policy at the RBA stated that the financial institution would continue with its active research on CBDCs despite the financial saying that there was no strong policy case for the issuing of one in September.
Acting as alternatives to issuing a CBDC, the bank has referred to the success of the country’s efficient and real-time New Payments Platform and said that it is willing to offer access to fiat banknotes up until when Australians will stop using them.
The central bank concluded by saying that this project will be completed by the end of the year, and it is ready to issue a report in 2021.