Title: Reserve Bank of Australia Tests Wholesale CBDC on Ethereum, Collaborating with Prominent Crypto Names
The Reserve Bank of Australia (RBA) has embarked on a pilot program to explore the use of a central bank digital currency (CBDC) built on the Ethereum blockchain. This initiative aims to evaluate the capabilities and potential of a CBDC while partnering with notable players in the crypto industry. The RBA joined forces with the Digital Finance Cooperative Research Centre (DFCRC) to undertake this blockchain research project.
With the publication of a comprehensive 44-page research paper, the RBA delves into the features and possible applications of an Australian CBDC. The prime objective was to engage with industry participants in a live transactional environment, putting the pilot CBDC to use.
In this groundbreaking pilot project, the RBA collaborated with industry giants such as Binance, Ripple, Stellar, and financial powerhouse JPMorgan. Over the course of the program, the central bank issued a significant amount of policy CBDC, accumulating a value of over half a million dollars. As the project concluded, all CBDCs were redeemed before bringing the project to a close.
Renowned crypto lawyer Bill Morgan stated, I believe this is a wholesale CBDC, given the Reserve Bank’s documents eventually lead to Project Dunbar, the Central Bank of Malaysia, and the Monetary Authority of Singapore, which focuses on multi-CBDC shared settlement platform prototypes.
The CBDC pilot was denominated in Australian dollars, down to the smallest unit. Interestingly, the RBA did not offer any interest on the holdings of the pilot CBDC. However, the platform introduced several notable functionalities, such as direct control, atomic settlement, and programmability, allowing holders to manage their CBDC independently without relying on intermediaries.
While the pilot CBDC platform did not support the deployment of smart contracts or other blockchain codes, it provided an integrated atomic settlement experience. Nonetheless, direct issuance and transfers to third-party platforms were not possible during this phase. The RBA explored the potential of wholesale CBDC and gained valuable insights from this transformative pilot project.
By venturing into the realm of CBDCs and forging partnerships with esteemed crypto entities, the Reserve Bank of Australia is staying at the forefront of technological advancements and digital currencies. With the successful completion of this pilot program, the RBA has paved the way for further exploration and potential implementation of a CBDC in the future, which could revolutionize the Australian financial landscape.
