Australia Announces Pilot for eAUD CBDC, Joins Mastercard for Testing

Australia’s central bank is tapping into the next, more advanced stage of refining its e-currency, codenamed eAUD. The country, which has been working on developing its own central bank digital currency (CBDC) for some time, has decided to launch eAUD in its experimental testing phase. The development was confirmed by the Reserve Bank of Australia (RBA) on Thursday, March 2. The eAUD CBDC will essentially represent the Australian Dollar on the blockchain, making transaction details immutable and in turn more transparent.

The RBA has engaged a group of fintech players to assist with the eAUD CBDC pilot. it is included master cardAustralia and New Zealand Banking Group (ANZ), Commonwealth Bank as well as local crypto players such as Monova and DigiCash.

“The pilot and wider 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 the economy,” Brad Jones, assistant governor (financial system) at the RBA, said in a prepared statement,

A cbdc Essentially a representation of a country’s fiat currency on the blockchain network. CBDC transactions, when rolled-out, will reduce central banks’ reliance on physical currencies, saving a fortune on printing and managing cash.

While ANZ will test the use of Australia’s CBDC for offline payments and nature-based asset trading, Mastercard will use the interoperability quotient of eAUD.

GST automation, fund custody and corporate bond settlement are among other domains where the use of the Australian CBDC will be tested during its pilot.

Australia’s Digital Finance Cooperative Research Center (DFCRC) is also working with the RBA on a CBDC initiative. The DFCRC is a 10-year, $180 million (about Rs 1,500 crore) research program funded by the Australian Government as well as industry partners and universities.

“A range of proposed use cases covers a range of problems that could potentially be addressed by a CBDC, including some that involve the use of a CBDC for atomic settlement of transactions in tokenized assets. Industry participants and The process of validating use cases with regulators will inform further research into design ideas for CBDCs that could potentially play a role in a tokenized economy,” said Dilip Rao, Program Director – CBDC with DFCRC, Said statement as part of the prepared.

In September last year the RBA issued a white paper In which it was claimed that the eAUD pilot could be completed by mid-2023.