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Australia’s Reserve Bank picks ConsenSys Ethereum Blockchain Company and Other Partners to Research CBDC

 
Australia’s Reserve Bank picks ConsenSys Ethereum Blockchain Company and Other Partners to Research CBDC
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On November 2, the Reserve Bank of Australia announced that it has formed a partnership with National Australia Bank, Commonwealth Bank, and ConsenSys Ethereum software company to examine the potential implications and use of a CBDC. Such a deal is part of the ongoing research that the Australia’s Central Bank is conducting on a State-Back Digital Currency.

The project focuses on the development of a POC (proof-of-concept) for the launch of a CBDC that traders and investors can use for settlement, funding, and repayment of tokenized assets on an Ethereum blockchain network. The POC would be utilized for the exploration of the implications (benefits and risks) of atomic transactions and delivery/payment settlements on the blockchain network and other important automation and programmability features of a Central Bank Digital Currency and other tokenized financial assets.

Michele Bullock, the Assistant Governor of the Reserve Bank of Australia, stated: “With this project we are aiming to explore the implications of a CBDC for efficiency, risk management and innovation in wholesale financial market transactions. While the case for the use of a CBDC in these markets remains an open question, we are pleased to be collaborating with industry partners to explore if there is a future role for a wholesale CBDC in the Australian payments system.”

The Central Bank aims to achieve the completion of the research project by the end of 2020. Parties would release a publication of a report on the project and key findings during the first half of next year.

Australia’s Central Bank Has No Immediate Plans to Issue CBDC

Australia’s Central Bank is the latest to join the rising number of Central Banks conducting experimentation on CBDCs. On October 14, the Reserve Bank of Australia stated that it has no immediate plans to launch a retail Central Bank Digital Currency. Instead, it said that would continue researching on CBDC, DLT (Decentralized Ledger Technology) and their use.

The bank has a greater focus on the use of a wholesale digital currency in specialized settlement and payment systems, particularly those associated with financial markets. Some the major attractive features of an institutional digital currency, which the Australia’s Central Bank seeks to explore and take advantage of, include instant settlements between market participants 24/7, atomic transactions or delivery versus payments (instant settlements opposed to waiting for funds to clear), and programmable money (the ability to attach conditions to how money could be transferred or spent).

While the U.S Federal Reserve is still at the decision-making stage to determine the issuance of CBDC, China is moving closer to issue to its DCEP (Digital Currency Electronic Payment) project. The Bahamas and Cambodia have already launched their CBDCs.

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