The Reserve Bank of Australia has entered the race to explore potential use cases for a CBDC in the country. The Digital Finance Cooperative Research Centre (DFCRC) will collaborate with the Australian Central Bank on this research project. In 2020, the RBA announced its plan to experiment with a possible CBDC to create a proof-of-concept (POC). This was for issuing a tokenized digital dollar for the wholesale market. Attention is now being focused on a potential CBDC that individuals and firms can use.
RBA has launched a one-year research project on CBDCs to assess their advantages and disadvantages. The RBA will collaborate with the DFCRC for a 12-month study. The RBA and DFCRC’s joint initiative will concentrate on “innovative use cases and business models” that may be aided by developing a CBDC. The project’s timetable and its technological, legal, and regulatory implications will also be considered during the course of the project. The Bank and the DFCRC will review industry use cases developed by stakeholders.
The pilot will include the selected instances, resulting in a unique research paper. At any time during the development of the initiative, interested industry participants can suggest new use cases that illustrate how a CBDC can be used to deliver innovative and value-added payment and settlement services to consumers and firms. The RBA and DFCRC have the authority to pick the usage cases that will take part in the test. As a steering committee member, the Australian Treasury will participate based on a prior study into the idea of a CBDC.
Around the world, over 100 countries` central banks have accelerated their efforts to establish a digital version of their national currencies. Nigeria and the Bahamas have led on that front. Privacy concerns have plagued certain CBDCs, with China being compelled to issue a statement stating that its digital yuan will safeguard users’ privacy. China’s “eCNY/” is well-established and has received broad public testing during the Winter Olympic Games in February, so other countries want to ensure they aren’t being left behind in the digital currency race.
The DFCRC is a $180 million research program sponsored by industry partners, universities, and the Australian Government that aims to bring together stakeholders in the finance business, academic institutions, and regulatory agencies to explore potential outcomes of the next market transformation.