The Reserve Bank of Australia (RBA) has revealed its plans to launch a one-year research program into the potential economic benefits of a Central Bank Digital Currency (CBDC). As announced by the Central Bank, the RBA will be partnering with the Digital Finance Cooperative Research Centre (DFCRC), a government-sponsored industry group.
The subject of a Central Bank Digital Currency is what is becoming so commonplace amongst apex banks today.
Financial evolution has pushed privately issued digital currencies to the limelight over the past decade and governments are keen on introducing a more controlled and stable alternative that will offer a similar benefit as the privately issued cryptocurrencies.
While the Australian RBA has not yet decided whether it will be issuing a CBDC yet, this one-year research program will be to explore a number of innovative use cases that can enhance the economic use of the CBDC should it be floated at all.
‘This project is an important next step in our research on CBDC. We are looking forward to engaging with a wide range of industry participants to better understand the potential benefits a CBDC could bring to Australia,’ said Michele Bullock, Deputy Governor of the Reserve Bank.
Reserve Bank of Australia to Debut the Right Use Cases
The research program will enjoin participants from members of the public as innovators will be invited to demonstrate use cases under which a potential CBDC can operate.
“The Bank and the DFCRC will select a range of different use cases to participate in the pilot, based on their potential to provide insights into the possible benefits of a CBDC. A report on the findings from the project, including an assessment of the various use cases developed, will be published at the conclusion. The findings will contribute to ongoing research into the desirability and feasibility of a CBDC in Australia,” the RBA announcement detailed.
The research will involve a limited-scale CBDC pilot design that will be made to operate in a limited environment. Besides the RBA, the Bank of Thailand, and the Bank of Japan amongst others are also advancing research into a potential CBDC while countries like Nigeria and the Bahamas have a fully functioning CBDC in circulation on their shores.