- RBA carries out a study on CBDC project
- Australia seeks to understand the risks involved in having a digital currency
The Reserve Bank of Australia (RBA) has started studying the possible effect a Central Bank Digital Currency (CBDC) project would have on its economy. The bank wants to build a virtual currency that would be backed by the Ethereum blockchain.
In the statement released by the bank, it was clarified that a proof-of-concept (POC) that will allow CBDC tokens to be issued to market players is currently being studied.
To achieve the aim of the bank, a partnership agreement has been reached with other financial institutions like National Australia Bank, Commonwealth Bank, Perpetual and popular blockchain company, ConsenSys Software.
The partners are going to seek ways to explore how a wholeform CBDC project can be used and whatever possible impact it could have on the dealings of the economy.
Michelle Bullock, RBA’s assistant governor, says that the aim of the project research is to determine the role the virtual currency could play in Australia’s financial payment system. Not only that, the research would be investigating the innovations, risks and efficiency that can be derived through the project.
This new narrative is a shift from the bank’s previous stance where some of its top executives had said the bank had no reason to issue a digital currency. Another of the top executives corroborated this claim when he said, the bank has no plans for a CBDC project, either in a retail form or wholesale.
CBDC projects on the rise globally
CBDC’s projects are currently on the rise globally as many countries have begun studying how they can integrate a virtual currency system into their current economy.
Presently, China is leading the pack as the governor of The People’s Bank of China (PBOC), Yi Gang, disclosed that the country’s Digital Yuan has recorded close to 4 million transactions.
Other countries like Bahamas have also launched a digital currency, The Sand Dollars, for the use of their citizens.