Top Australia banks part of central bank digital currency pilot

ANZ Group Holdings and the Commonwealth Bank of Australia (CBA) are among the leading participants in a pilot project exploring use cases for a central bank digital currency (CBDC).

In a statement on Thursday (Mar 2), the Reserve Bank of Australia (RBA) said it was working with the two banks to see how a CBDC could provide the country with economic benefits.

CBDCs, like banknotes and coins, would be the direct liability of a central bank, carrying its guarantee.

Sophie Gilder, CBA managing director for blockchain and digital assets, said: “Two areas where we see the most potential are real asset tokenisation and smart payments, and we have chosen to explore use cases in those domains. It is essential that Australia continues to build our capabilities in this key area of finance and explore the possibilities of emerging technologies.”

Central banks around the world are exploring the future of digital-asset technology, with the speed and cost of real-time interbank payments being a key area of interest. A report on the Australian project is expected to be published around the middle of the year.

RBA assistant director Brad Jones said: “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 policymakers’ understanding of how a CBDC could potentially benefit the Australian financial system and economy.”

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Some 114 countries – representing over 95 per cent of global gross domestic product – are exploring a CBDC. The Atlantic Council said that 11 nations have fully launched a digital currency.

In the US, the Treasury Department will lead a new senior-level working group that will soon start regular talks on the possible launch of a digital dollar. In China, hundreds of millions of consumers have already used the digital yuan during trials.

For the Australian pilot, ANZ will distribute the CBDC to selected participants on behalf of the RBA and will also test three use cases across pension fund payments, offline payments and the tokenisation of carbon credits. BLOOMBERG