On 2 March 2023, the Reserve Bank (RBA) confirmed further details of the pilot projects which it has approved to assess the potential use cases and economic benefits of a central bank digital currency (CBDC) in Australia.
Assistant Governor (Financial System) at the RBA, Brad Jones, said:
We are delighted with the enthusiastic engagement by industry in this important research project. It has also been encouraging that the use case providers that have been invited to participate in the pilot span a wide range of entities in the Australian financial system, from smaller fintechs to large financial institutions.
The RBA's CBDC pilot will use a limited-scale pilot CBDC that is a real digital claim on the RBA. The project received a large number of use case submissions from a range of industry participants. Dilip Rao, Program Director - CBDC with the Digital Finance Cooperative Research Centre said:
The variety of use cases proposed covers a range of problems that could potentially be addressed by CBDC, including some that involve the use of CBDC for atomic settlement of transactions in tokenised assets.
A range of criteria were considered by the RBA when selecting the use cases to participate in the pilot, including the potential to provide insights into the possible benefits of a CBDC.
According to Brad Jones:
The pilot and broader 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 economy.
The RBA has announced the following selected use cases and providers:
Use Case Description
Use Case Description
Nature-based Asset Trading
ANZ / Commonwealth Bank
ANZ / Oban
Corporate Bond Settlement
Australian Bond Exchange
Tokenised FX Settlement
Commonwealth Bank / Intuit
CBDC Custodial Models
High Quality Liquid Assets Securities Trading
Interoperable CBDC for trusted Web3 commerce
Mastercard / Cuscal
Dilip Rao commented on the project stating that:
The process of validating use cases with industry participants and regulators will inform further research into design considerations for a CBDC that could potentially play a role in a tokenised economy.
A report on the project is anticipated to be published around the middle of 2023.