RBA will base its CBDC project on Ethereum

The Reserve Bank of Australia is currently investigating use cases for a Proof-Of-concept CBDC which will be settled on an Ethereum-based distributed ledger technology (DLT) platform. Its findings will be published in a public report due out in the middle of this year. 

With China continuing to roll out pilot trials for its digital Yuan, and the Bank of England exploring the feasibility of a CBDC, the future of currency seems about to take a digital turn. Japan and India are two other major countries looking into this technology. The US has not announced any research on the subject as yet. 

The RBA has partnered with CBA, NAB and ConsenSys in order to develop the project. According to the Australian website itnews, the use cases for the CBDC include “the origination and servicing of tokenized loans”. 

The Deputy head of the payments policy department Chris Thompson stated: 

“The project is underway at the moment [and] we’re looking to finish it very soon. We are looking to put out a public report on the project hopefully in the middle of the year.” 

Lisa Wade, the director of NAB said: 

“We’re very interested in how blockchain can help us in markets where there are lots of inefficiencies,” she said. 

“We wanted to start with a syndicated loan because they’re high value, low volume transactions and there are lots of duplicated processes in the ecosystem, lots of errors or potential for errors, and lots of operational risks. 

“We very much came into this project looking at the utility of the CBDC from a wholesale point of view, just on those large transactions to remove those errors, save time, and we’re very interested in atomic settlement”. 

Noises coming out of Australia’s central bank are actually quite negative as regards the need for a digital Aussie dollar. The bank has said that “cash is still widely available and accepted as a means of payment”. 

However, the bank will “continue to consider the case for a CBDC”. Wade, who originally started off with a negative view has certainly changed her stance since working on the project. She says that decentralised finance “is the future”. 

“I believe that if we don’t start building central bank digital currencies, that people will just use alternative mechanisms,” 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice. 

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