The Reserve Bank of Australia (RBA) published a report on Wednesday outlining its selected use case proposals of a central bank digital currency (CBDC) alongside their respective providers. This report serves as a follow-up to a collaborative research project with the Digital Finance Cooperative Research Centre (DFCRC), exploring the possible use cases of a CBDC and its benefits to the Australian economy. 

Launched in September 2022, the CBDC research project involved the submission of potential CBDC use cases by various industrial entities, of which only a few were chosen to participate in the CBDC live pilot.

According to its report yesterday, the RBA stated, “The project received a large number of use case submissions from a range of industry participants. A range of criteria was considered in selecting the use cases to participate in the pilot, including the potential to provide insights into the possible benefits of a CBDC.”

That said, some of the selected CBDC use cases announced by the Australian apex bank include offline payments, tokenized FX settlement, corporate bond settlement, construction payments, etc. In all, 14 use cases were selected, alongside 14 providers ranging from small fintech firms to large financial institutions. 

These use case providers included Mastercard, the Australian Bond Exchange, Fame Capital, Monoova, Unizon, ANZ, and so on. 

Australia To Launch CBDC Pilot In Coming Months

Another exciting point from yesterday’s RBA (Financial System) report is that Australia intends to launch its CBDC “live pilot” in the coming months. Although no initial date or month was stated, the RBA looks all set to go having concluded its use case selection process. 

Commenting on the report, RBA Assistant Governor, Brad Jones, emphasized the importance of the CBDC pilot, saying, “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 policy makers’ understanding of how a CBDC could potentially benefit the Australian financial system and economy.”

CBDCs: The Next Big Thing?

The concept of CBDCs is currently a hot topic in the global financial system. Various Central banks worldwide have been conducting research exploring the integration of these digital currencies with their nation’s individual economies.

Since the start of 2023 especially, the discourse around CBDCs has gained much traction, with several first-world countries showing much reception towards the idea.  

In February, the UK treasury released a roadmap to the launch of its own CBDC – the digital pound. During the same month, the Bank of Russia also announced the launch of its CBDC pilot, which is set to begin by April 1st.

Meanwhile, the Reserve Bank of India, which had already begun its CBDC pilot in December, announced a remarkable milestone of 50,000 active users of the digital rupee. 

For now, CBDCs appear to be the next financial revolution, especially as the world gears toward a digital economy. 

In other news, the cryptocurrency market has been rather unstable in the last few days, with major assets recording some slight losses. According to data from CoinMarketCap, Bitcoin, the market’s leader, is currently valued at $23,410.49, having gone down by 4.12% in the last seven days. 

BTC trading at $23,368 | Source: BTCUSD Chart on Tradingview.com