Reserve Bank of Australia Begins New Pilot to Explore CBDC Use Cases

Reserve Bank of Australia (RBA) will develop a “limited-scale” pilot to explore use cases and potential economic benefits of a central bank digital currency (CBDC).

iexclusivenews reports that the Australian central bank intends to establish a CBDC that will function in a ring-fenced setting.

One or more of the user’s financial assets are divided into a ring-fence environment, which may protect one from the other in the event of a breach.

The renovation will be finished in roughly a year, according to a Tuesday announcement.

The RBA declared in 2020 that it intended to investigate the possibility of a CBDC by creating a proof-of-concept (POC) for the issuing of a tokenized digital dollar for usage by the wholesale market.

Meanwhile, iexclusivenews Nigeria reports that currently, a prospective CBDC for usage by homes and businesses is the focus.

The RBA notes that while the central banks of almost all developed economies are at least considering implementing a CBDC.

It is still unclear whether such a program is necessary for desirable in countries like Australia.

“A question that has received less attention to date, especially in countries like Australia that already have relatively modern and well-functioning payment and settlement systems, is the use cases for a CBDC and the potential economic benefits of introducing one,” the central bank said.

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Central banks abroad want to make sure they are not falling behind in the fight for the top spot in the digital currency market.

Because China’s “eCNY/” is already reasonably well established and received widespread prolonged trials at the Winter Olympic Games in February.

The RBA will outline its goals for the projects in a paper that will be published in the coming months, and interested industry organisations will be able to participate.