Australia Pushes Ahead With Central Bank Digital Currency, Announces Pilot Timeline

Australia is pushing ahead with central bank digital (CBDC) currency research. On Monday, Australia’s central bank said in a whitepaper that the country’s CBDC pilot should be completed by mid-2023. 

The plan, according to the Reserve Bank of Australia (RBA), is to research the use cases for a CBDC in Australia and try it out in an experiment using Quorum, an enterprise-grade, private variant of Ethereum. 

Today’s whitepaper said that the pilot—which kicked off in July and is being run in partnership with the Digital Finance Cooperative Research Center (DFCRC)—doesn’t mean the RBA will necessarily release a CBDC. 

A CBDC is a digital version of a country’s fiat currency—in this case the Australian dollar. Today’s whitepaper said Australia’s CBDC would be called eAUD. 

CBDCs are different from other digital currencies like Bitcoin because they are centralized. Bitcoin is decentralized meaning no central party has control of it. But CDBCs like the eAUD are controlled by the state’s central bank. 

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“The project is seeking to facilitate ideation and innovation in use cases, and in turn use those results to better understand the case for introducing a CBDC in Australia,” the whitepaper said, adding that it was expecting industry participants like financial institutions, fintechs and established businesses to contribute to the research. 

It noted that the research does not mean the RBA wants to wean Australian citizens off using cash.

Countries around the world are in different stages of researching or releasing CDBCs. China is fast pushing ahead with its digital yuan by letting citizens try it out in a growing number of provinces. 

Last week, five speakers at a hearing for the U.S. House Committee on Financial Services voted in favor of the U.S. developing a digital currency in some form, citing concern that it may be falling behind China.