Reserve Bank of Australia Partners with Commonwealth Bank on CBDC

| Updated
by Ibukun Ogundare · 3 min read
Reserve Bank of Australia Partners with Commonwealth Bank on CBDC
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The research group in Australia will jointly explore the possible use and implications of CBDC in wholesale form, using distributed ledger technology (DLT).

The Reserve Bank of Australia (RBA) is partnering with Commonwealth Bank, National Australia Bank, and two other groups to research the wholesale use of Central Bank Digital Currency (CBDC). The two other groups involved in the partnership are the Perpetual and a blockchain software engineering company ConsenSys

The Bank of Australia announced its partnership with the other financial institutions and the software company on the 2nd of November. The group will jointly explore the possible use and implications of CBDC in wholesale form, using distributed ledger technology (DLT). 

As stated in the announcement, the companies plan to complete the collaborative project by the end of 2020. After then, the financial groups and the software company would publish its main findings in a report during the first half of 2021. 

The assistant governor of the RBA Michele Bullock noted the purpose of the joint effort:

“With this project we are aiming to explore the implications of a CBDC for efficiency, risk management and innovation in wholesale financial market transactions… we are pleased to be collaborating with the industry partners to explore if there is a future role for a wholesale CBDC in the Australian payments system.”

As a part of the research, the project will also examine the development of a proof-of-concept (POC). The POC will enable the issuance of a token form of CBDC for wholesale market participants. 

Specifically, the announcement said the wholesale market participants can use the tokenized CBDC for funding, settlement and repayments of tokenized syndicated loan on an Ether-based DLT platform. 

In addition, the POC can be used to examine the “implications of ‘atomic’ delivery-versus-payment settlement on a DLT platform.”

Apart from that, the project will also explore certain features like programmability and automation of the tokenized form of CBDC and financial assets. 

Previous Comments of Reserve Bank of Australia on CBDC

Before now, the Reserve Bank of Australia said there was no need to issue a CBDC in the country. This was revealed on the 17th of September. About a month later, the RBA, however, said the bank would continue to consider a case for digital currency. The head of payments policy at the RBA Tony Richards revealed the development during a conference at the University of Western Australia.

At that time, Richards also said that the RBA would continue to research the CBDC design. The executive also added that research would continue on CBDC’s potential benefits and implications. 

Other Central Banks’ Efforts on CDBC

Several countries, including China and Japan, have been making significant progress in the creation of CBDCs. 

Recently, Cointelegraph reported that the People’s Bank of China published a regulatory framework for its forthcoming digital yuan. The draft law legitimizes digital yuan, supporting China’s plan to officially roll-out its digital currency. Notably, China is planning to officially launch digital yuan before the Winter Olympics in Beijing. 

On the other hand, the Reserve Bank of New Zealand said it has no immediate plans to launch its digital currency. 

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Ibukun Ogundare

Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.

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