Australia's central bank launches digital currency project

It will involve the development of a limited-scale CBDC pilot that will operate in a ring-fenced environment

Australia's central bank on Tuesday said it was launching a one-year research programme into the case for a central bank digital currency (CBDC) in Australia, focusing on what potential economic benefits it might bring.

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The Reserve Bank of Australia (RBA) is partnering with the Digital Finance Cooperative Research Centre (DFCRC), a government-backed industry group, in the program.

The project will seek to identify innovative use cases and business models that could be supported by the issuance of a CBDC, and better understand of some of its technological, legal and regulatory considerations.

It will involve the development of a limited-scale CBDC pilot that will operate in a ring-fenced environment and involve a pilot CBDC that is a real claim on the RBA.

Interested industry participants will be invited to develop specific use cases that demonstrate how a CBDC could be used to provide innovative and value-added payment and settlement services to households and businesses.