Australia issues white paper for central bank digital currency – Financial Bitcoin News

The Reserve Bank of Australia is studying the merits of launching a central bank digital currency. The monetary authority issued a white paper outlining its objectives and invited interested parties to submit proposals and suggest pilot projects.

Australia’s central bank will enable CBDC by mid-2023

The Reserve Bank of Australia (RBA) plans to investigate use cases for a digital version of the Australian dollar. It is collaborating on the project with the Digital Finance Cooperative Research Center (DFCRC), which is supported by the government and the financial sector. This week, the two released a white paper for Central Bank Digital Currency (CBDC).

The document, titled “Australian CBCC Pilot for Digital Financial Innovation,” details the main objectives of the initiative and explains the design of the new currency. Members of the industry are invited to take advantage of issues that have the potential to improve Australia’s economy and financial system, the RBA announced.

The monetary policy watchdog said one of its key tasks was to explore business models that could be supported by the CBCC. The pilot project, which started in July and will be completed by mid-2023, will allow financial authorities to better understand the technological, legal and regulatory issues related to the central bank’s digital currency offering.

Compelling use cases, wholesale or retail, will be included in the pilot and used to assess the rationale for an Australian digital currency, the RBA said. A range of stakeholders including financial institutions, fintech firms, public sector agencies and technology companies are welcome to participate in the project.

Regulators such as the Australian Securities and Investments Commission (ASIC) and the Australian Transaction Reports and Analysis Center (AUSTRAC), the country’s financial reporting agency, also work on regulatory implications that may arise during the test.

Only residents and local companies to hold Australian digital currency in trial phase

The Central Bank of Australia’s pilot digital currency, called eAUD in the document, will also be denominated in Australian dollars. Coins in circulation will be capped at an amount determined by the RBA, taking into account the requirements of the selected use case providers.

Only Australian residents and entities registered in the country can hold eAUD and the holdings will have no interest. All end users must be invited by an approved use case provider or provider who knows your customer. CBDC is stored in custodial and non-custodial wallets.

The Reserve Bank of Australia has specifically stated that the research project does not indicate an intention to end the use of paper money. “The RBA is committed to ensuring that Australians continue to have access to good physical currency for as long as people want or want to use it,” the official said.

With the increasing circulation of cryptocurrencies over the past few years, dozens of central banks around the world have begun to explore the option of issuing digital versions of their fiat currencies, and some have launched pilot CBCC projects.

In mid-August, Australia’s securities regulator asserted that the growing popularity of cryptocurrencies was a “strong case for regulation.” ASIC cited a survey, according to which 44% of the country’s retail investors held crypto by the end of 2021. Later that month, the Australian Treasury announced plans to stockpile crypto holdings.

Tags in this story

Australia, Australian, Australian dollar, CBCC, central bank, crypto, cryptocurrency, cryptocurrency, digital currency, eAUD, monetary authority, pilot, pilot project, project, research, Reserve Bank of Australia, use cases.

Do you think Australia is developing other central bank digital currencies? Share your thoughts on the topic in the comment section below.

Lubomir Tasev

Lubomir Tasev is a tech-savvy Eastern European journalist who likes Hitchens’ quote, “Being a writer is not what I do, but what I am.” Apart from crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

Image credits: Shutterstock, Pixabay, Wiki Commons

DisclaimerThis article is for informational purposes only. It is not an offer or solicitation to buy or sell, or a recommendation or endorsement of any products, services or companies. does not provide investment, tax, legal or accounting advice. Neither the Company nor the Author shall be liable, directly or indirectly, for any damages or losses arising out of the use of or reliance on any content, goods or services referred to in this paragraph.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *