Australia Plans to Pilot CBDC – eAUD in 2023

    The Reserve Bank of Australia (RBA) has gone public with a pilot project for eAUD.

    According to the whitepaper published on September 26, the Reserve Bank of Australia (RBA) collaborated with the Digital Finance Cooperative Research Centre (DFCRC) to implement the pilot project for eAUD, the central bank digital currency (CBDC). This project aims to explore use cases and business models of CBDC issuance and is also an opportunity to further understand the technological, legal, and regulatory considerations associated with a CBDC. The project is expected to be released from July 2022 to mid-2023.

    Look at the below table for indicative project timelines: 

    Source: RBA

    DFCRC is a $180 million research program that takes place over 10 years, funded by industry partners, universities, and the Australian Government. Its mission is to bring together stakeholders in the finance industry, academia and regulatory sectors to develop and harness the opportunities arising from the next transformation of financial markets – the digitization of assets that can be traded and exchanged directly and in real-time on digital platforms.

    We can see all the effort and expectations of the Australian Government for this project and on the digital financial market. If the pilot brings good results, it is only a matter of time before the CBDC launch.

    Source: RBA

    In the pilot platform, DFCRC selected the Ethereum blockchain and developed a smart contract based on the ERC-20 standard, in which eAUD is backed by fiat and is legally responsible by the RBA. Participants in the pilot are financial institutions, public sector agencies, businesses, fintech, start-ups, and technology providers. 

    “Pilot participants will bear their own costs for the conception, design, development, implementation and piloting of use cases, if selected,” clarifies RBA.

    In general, eAUD is similar to stablecoins. But in terms of security and liquidity, eAUD has many advantages in use over stablecoins.

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