Australia's central bank is launching a research project to analyze the central bank's digital currency (CBDC) application methods.
The Reserve Bank of Australia, also known as Australia’s central bank and banknotes issuing authority, is set to collaborate with the Digital Finance Cooperative Research Centre (DFCRC) to launch a pilot exploring the benefits of a central bank's digital currency (CBDC).
According to the press release shared on Australia’s Reserve Bank's official website, the bank is aiming to complete the research in a year, acquiring all the necessary information about “innovative use cases and business models” of the CBDC application.
Did you know?
Want to get smarter & wealthier with crypto?
Subscribe - We publish new crypto explainer videos every week!
What is Polkadot in Crypto? (DOT Animated Explainer)
The central bank plans to issue a CBDC, which will operate in a ring-fenced environment for a fixed period of time. Ring-fenced environment refers to the action of separating one portion of a user's “financial assets from the rest, potentially securing one from the other in case of a breach”.
Industry stakeholders will be eligible to provide suggestions on how to showcase CBDC and how it can “provide innovative and value-added payment and settlement services” to benefit Australian households and businesses.
Afterward, the Bank and DFCRC are planning to select a handful of use cases, which will be applied to conduct the research.
Deputy Governor of the Reserve Bank, Michele Bullock is hopeful for this research:
This project is an important next step in our research on CBDC. We are looking forward to engaging with a wide range of industry participants to better understand the potential benefits a CBDC could bring to Australia.
The bank informs that further information about objectives, project approaches, and “how industry participants will be able to engage” will be shared in the next few months.
Australia is not the only country searching for ways to incorporate CBDC into the daily life of the county’s residents. Recently, the Bank of Thailand has also announced its plans to launch retail CBDC testing. On the other hand, China and the Bahamas are already starting to share their digital cryptocurrency among the public.