The Reserve Bank of Australia (RBA) is collaborating with the Digital Finance Cooperative Research Centre (DFCRC) on a research project to explore potential use cases and economic benefits of a central bank digital currency (CBDC) in Australia.
The project involves selected industry participants demonstrating potential use cases for a CBDC using a limited-scale pilot CBDC that is a real digital claim on the Reserve Bank. The project received a large number of use case submissions from a range of industry participants. A range of criteria were considered in selecting the use cases to participate in the pilot, including the potential to provide insights into the possible benefits of a CBDC.
The selected use case proposals, along with their providers, have been invited to participate in the live pilot, which will take place over the coming months. The use cases include: CBDC custodial models; corporate bond settlement; cross border settlement and custody; and tokenized HQLA securities trading.
Brad Jones, assistant governor in the Financial System division at the RBA, said in a statement: “We are delighted with the enthusiastic engagement by industry in this important research project. It has also been encouraging that the use case providers that have been invited to participate in the pilot span a wide range of entities in the Australian financial system, from smaller fintechs to large financial institutions. The pilot and broader research study that will be conducted in parallel will serve two ends – it will contribute to hands-on learning by industry, and it will add to policy makers’ understanding of how a CBDC could potentially benefit the Australian financial system and economy.”
Dilip Rao, program director for CBDC with the DFCRC, said in a statement: “The variety of use cases proposed covers a range of problems that could potentially be addressed by CBDC, including some that involve the use of CBDC for atomic settlement of transactions in tokenised assets. The process of validating use cases with industry participants and regulators will inform further research into design considerations for a CBDC that could potentially play a role in a tokenized economy.”