The project will “explore if there is a future role for a wholesale CBDC in the Australian payments system,” according to the RBA.
According to a Nov. 2 announcement from The Reserve Bank of Australia, or RBA, the financial institution will be partnering with the Commonwealth Bank, National Australia Bank, the financial services company Perpetual, and software company ConsenSys on a project to explore the potential use of a wholesale central bank digital currency in the country using “Ethereum-based distributed ledger technology.”
The RBA stated it would be researching the development of a proof-of-concept for “the issuance of a tokenized form of CBDC.” It specifically mentioned wholesale market participants potentially using the digital currency for tokenized syndicated loans on an DLT platform and exploring the implications of delivery-versus-payment security settlements with cross-chain atomic swaps.
“With this project we are aiming to explore the implications of a CBDC for efficiency, risk management and innovation in wholesale financial market transactions,” stated Reserve Bank of Australia Assistant Governor Michele Bullock.
“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,” he added.
The move is part of an ongoing about-face for the RBA when it comes to CBDC policy. On Oct. 14, the head of payments policy at the RBA said the bank would continue to research CBDCs despite the financial institution stating there was not a strong policy case for issuing one in September.
As alternatives to issuing a CBDC, the bank has pointed to the success of the country’s efficient, real-time New Payments Platform, and stated it is willing to provide access to fiat banknotes “for as long as Australians wish to keep using them.”
The central bank said the project will be finished by the end of the year and it will issue a report in 2021.