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In the upcoming months, the Reserve Bank of Australia will begin a “live pilot” of eAUD

Offline transfers to “trusted Web3 commerce” are just two of the CBDC’s many potential applications; those in the banking sector are among those asked to participate in a live trial.

The Reserve Bank of Australia and the Digital Finance Joint Research Center, an Australian financial research center, have released a combined statement saying that “in the coming months” the Reserve Bank of Australia will start a live trial of a central bank digital money. A white paper released on Monday revealed that the Reserve Bank of Australia (RBA) plans to wrap up its central bank digital currency (CBDC) trial by the middle of 2023.

The RBA announced, in conjunction with Australia’s Digital Finance Joint Research Center, that it had asked a select group of businesses (including ANZ and Mastercard) to assist in exploring 14 use cases for the eAUD. Cases in point vary from easing the process of making offline payments to issuing tokenized receipts to buyers and sellers at livestock sales. On March 2, the RBA announced that it would be working with the DFCRC on a study to examine possible use cases and fiscal advantages of a central bank digital currency (CBDC) in Australia.

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.

RBA’s Assistant Governor Brad Jones stated

Canvas Digital, a layer-2 network constructed on top of Ethereum that employs zero-knowledge roll-ups to enable transactions, was also mentioned in the statement. Canvas has been asked to test the settling of foreign currency deals using Circle’s USDC stablecoin and the eAUD, both of which were developed in collaboration with the Israeli company StarkWare.

According to the website of the American think tank Atlantic Council, more than ten nations have started a CBDC and another 89 countries are either testing, creating, or studying a CBDC. As of next month (April), Japan will begin its CBDC trial program. Australia’s experimental currency would be named eAUD, and the white paper explains that everyone involved in the CBDC initiative will have to be asked and authorized.

Use cases being tested include offline payments, tax processing and a CBDC for “trusted Web3 shopping,” with members of the experiment spanning from banks — such as Commonwealth Bank and Australia and New Zealand (ANZ) bank — to payment companies such as Mastercard.

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