Reserve Bank of Australia Rolls Out CBDC Pilot Project

blockchain.news:

The Reserve Bank of Australia (RBA) has launcheda year-long trial to explore a central bank digital currency's (CBDC) business models and innovative use cases.

The Australian central bank highlighted that the pilot project aimed at getting better insights into the regulatory, legal, and technological aspects of CBDCs. 

Michele Bullock, RBA’s Deputy Governor, pointed out:

“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 understand better the potential benefits a CBDC could bring to Australia.”

By partnering with the Digital Finance Cooperative Research Centre (DFCRC), the RBA seeks to comprehend the feasibility and desirability of a CBDC on Australian soil. 

The DFCRC is an industry group backed by the Australian government and will be mandated with inviting different players to create specific CBDC use cases. 

The issuance of CBDCs by apex global banks continues to gain steam. For instance, earlier this year, the Central Bank of Kenya (CBK) changed its tune about crypto assets because it soughtpublic opinion about the potential introduction of a CBDC. 

The CBK acknowledged some of the benefits rendered by a CBDC, including minimizing cross-border payment costs and offering financial inclusion to those limited by technological knowledge or infrastructure. 

Nevertheless, the Kenyan apex bank cautioned about potential risks triggered by CBDCs, like hindering the effectiveness of the monetary policy by opening doors to money laundering and constraining commercial banks.

Since CBDCs represent the digital form of a nation’s fiat money, they are controlled directly by the country’s central bank and backed by national credit and