Digital currency used in landmark cattle sale for rural economy
In a landmark transaction for the Australian economy, one that points to the arrival of accessible agricultural payments technology, a NSW cattle auction was settled by two farmers using a digital version of the Australian dollar backed by the Reserve Bank.
The dynamics could disrupt the broking and sales processes for soft commodities, including livestock, underlining the potential benefits to the rural sector from a central bank digital currency.
FarmGate’s Chanel Gallen; Peter Kennedy and Peter Godbolt, from Fame Capital; FarmGate’s Richard Norton, photographed at Moss Vale Saleyards, NSW. Louie Douvis
Last Friday, on a new rural auction platform known as FarmGate, 18 Angus-cross steer yearlings were sold for $1050 per head ($18,900). The seller was RJ & JE Gillham, farmers in Boggabri, NSW, and the buyer EG & DJ Humphries, who run a property in Gunnedah, another small town in NSW.
Cattle sales are, of course, big business in Australia; the beef farming industry traded almost $11 billion in stock last year. But this deal was noteworthy because it was facilitated by a new form of money, on a new platform holding extensive data about the animals.
Still in pilot form, the sale was settled using a CBDC, which some are calling the eAUD.
FarmGate will allow accredited vendors to self-assess livestock without an agent by embedding DNA information for particular animals. Buyers can see progeny and likely yield rates, based on marble scores. Down the track, geolocation information from chips embedded into animals’ ears will be added, which may allow sellers to get a premium for stock raised sustainably.
The CBDC provides instant settlement; while the existing payments system is also real-time, bank account details do not
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