Australia’s central bank has announced that it will undertake a one-year study on a CBDC. The study will examine the merits and demerits of issuing a CBDC in the country.
Also, the report said the central bank is willing to partner with other industry participants. They can submit their recommendations and potential CBDC uses cases to the central bank.
Australia’s Central Bank Partners With The DFCRC
The RBA (Reserve Bank of Australia) also said it would collaborate with the DFCRC (the Digital Finance Cooperative Research Center) on the CBDC project.
The DFCRC would assist the RBA in launching the CBDC. Their main focus would be on the financial and economic benefits of issuing a CBDC. The CBDC test would last for 12 months.
However, the research would also look at the negative effects of such actions. According to the RBA’s Deputy Governor, Michele Bullock, the project is very important for the country’s CBDC journey.
Also, Bullock added that the central bank is open to collaborating with various industry participants to understand the benefits of a CBDC in Austria.
According to the RBA, the CBDC research will also focus on the use cases of a CBDC. As a result, interested participants in the crypto industry can develop or recommend certain uses of a CBDC to the bank.
These recommendations must highlight how a digital currency can provide settlement services and value-added payments to businesses and households. Afterward, the DFCRC and the RBA can choose the suggestions that would take part in the trial program.
Australia’s Treasury Department To Take Part In The Research
Additionally, the country’s Treasury department will take part in the research. It will function as part of the steering group due to its past research on CBDCs.
According to the DFCRC’s CEO, Andreas Furche, a CBDC has gone past the stage of whether it is feasible or not. Furche believes the major question now is what are the benefits of a CBDC.
Globally, most central banks have plans to issue or have issued a virtual version of their national currencies. According to previous reports, about 100 nations have taken steps to launch a CBDC.
Countries like the Bahamas and Nigeria are among of the pioneer countries that have launched a CBDC. According to the IMF (International Monetary Fund), most central banks believe that CBDCs would allow cheaper transactions and boost financial inclusion.
However, there have been numerous concerns about privacy in relation to using CBDCs. Countries like China have been accused of using CBDCs to monitor citizens. The government has stated that it would protect the privacy of those using its digital Yuan.
