Australia Announces CBDC (eAUD) Pilot

States are facing an irresistible adoption of cryptocurrencies. They have found no other way than to launch into the issuance of CBDCs in an attempt to oust them. Just yesterday, Australia announced the launch of its CBDC pilot project. The Reserve Bank of Australia will work with the private sector to explore more than a dozen use cases.

Soon the eAUD, the Australian digital dollar, will be born

Along with various commercial banks, the Australian central bank is also considering the launch of a CBDC. Australia moved closer to the potential establishment of a central bank digital currency (CBDC) on Wednesday. The Reserve Bank of Australia (RBA) has indicated a pilot phase for its digital version of the Australian dollar called eAUD.

In announcement Jointly with Australia’s Digital Finance Cooperative Research Centre, the RBA said it has invited a small number of companies to help explore 14 use cases for eAUD. He asked companies like ANZ And MasterCard to participate in the program. These use cases will range from facilitating offline payments to tokenized invoices for businesses. They will also include the livestock auction. ” The pilot and larger study that will be conducted in parallel will serve two purposes. It will contribute to hands-on learning by industry, and it will add to policymakers’ understanding of how a CBDC could potentially benefit the country’s financial system and the Australian economy. said RBA Deputy Governor Brad Jones.

Another company included in the ad was Canvas Digital, a Layer 2 network built on top of Ethereum. It uses zero-knowledge accumulations to facilitate transactions. The network was built in collaboration with the Israeli company StarkWare, and uses the USDC stablecoin and eAUD. Canvas was asked to lead the settlement of foreign exchange transactions. ” We see that there are huge benefits to using CBDCs and currencies like USDC in currency trading and international remittances. said David Laavecky, co-founder and CEO of Canvas Digital.

US threats to the idea of ​​an Australian CBDC

Indeed, CBDCs are similar to stablecoins. These are digital currencies pegged to the price of a fiat currency, such as the US dollar. However, they are not maintained by private companies that issue tokens on decentralized networks. CBDCs are fully supported and maintained by their respective governments. To date, more than 10 countries have launched a CBDC. Additionally, 89 others are piloting, developing, or researching a CBDC. These statistics are from website of the American think tank Atlantic Council. Last month, Japan announced that it would launch a CBDC pilot program in April.

Jones commented on the increased pressure countries have faced in recent years to establish a CBDC. ” I have absolutely detected a change in the last 18 months or so. There has been growing support, particularly in Congress, behind the idea that the primacy of the US dollar and its role in the international financial system could be threatened if everyone else races ahead and the US is behind. “, he said in a speech published Wednesday on the RBA website.

Jones pointed out that CBDCs have the ability to make cross-border payments more efficient, reduce costs associated with transactions and increase the speed at which they can be settled. ” It still costs, on average, around 5% to send your money abroad [en Australie]. Moreover, these transactions can take up to a few days to settle, which is clearly unsatisfactory. “, did he declare.

eAUD, a true reserve digital debt

The Australian bank said it has been researching CBDCs for a number of years. She says she previously “provided industry with a blank digital canvas to submit their proposals” on how a CBDC could be operated. He said : ” We didn’t want to be so intellectually arrogant that we thought we had all the answers.. said his deputy director.

Another aspect of the RBA’s pilot program is that ” the eAUD is a true digital claim on the reserve bank. She is not not just an exercise conducted in some sort of abstract sandbox said Jones. He was referring to some experiments involving CBDCs that have taken place in New York. For example, the Federal Reserve has explored the concept of issuing its own tokenized dollar for years. It even published research on the subject as far back as 2016. Additionally, the San Francisco Federal Reserve recently posted job postings related to the development of CBDCs. It was looking for people who could help the central bank develop a digital version of the US dollar.

However, not all legislators are on the same page. Republican House Majority Whip Tom Emmer last month reintroduced legislation that would prohibit the Federal Reserve from issuing a CBDC. According to him, as stated in a recent tweetit is a step forward that would “deprive Americans of their right to financial confidentiality”.

The pilot launch of a CBDC project is not synonymous with its issuance. However, it represents an important phase of it. But everything suggests that Australia will be one of the countries with its own CBDC. Unable to Stop Cryptocurrencies, Will Central Banks Sovietize Everything with CBDCs?

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