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Australia is close to establishing a CBDC (central bank digital currency), after the Reserve Bank of Australia (RBA) announced on Wednesday an upcoming pilot phase for a digital version of the Australian dollar (eAUD).
According to an announcement by the RBA, the project is done in collaboration with the Digital Finance Cooperative Research Centre (DFCRC), and involves selected industry participants demonstrating potential use cases for a CBDC that is a "real digital claim" on the RBA.
“The variety of use cases proposed covers a range of problems that could potentially be addressed by CBDC, including some that involve the use of CBDC for atomic settlement of transactions in tokenised assets," said Dilip Rao, CBDC program director at DFCRC.
"The process of validating use cases with industry participants and regulators will inform further research into design considerations for a CBDC that could potentially play a role in a tokenised economy," he added.
The RBA also revealed that use cases from several major financial institutions including ANZ, Mastercard, and Commonwealth bank have been selected to participate in the testing phase.
Regulatory developments
Earlier this month, Australia's government announced the initial step of what it dubs as a "multi-stage approach" to tackling cryptocurrency regulation.
According to an announcement, “the multi-stage approach has three elements: strengthening enforcement, bolstering consumer protection; and establishing a framework for reform.”
The first stage involves the Australian Securities & Investments Commission (ASIC) increasing the size of its crypto team and “upping enforcement measures", which includes taking legal action when cryptocurrencies are marketed without the appropriate credit or financial services licence.
The government also intends to "reform the licensing and custody of crypto assets, particularly for the subset of crypto assts that currently fall outside the financial services regulatory framework."
In January, Stephen Jones, the country's Financial Services minister, said that regulators are considering treating certain cryptocurrencies as financial products under the law, with the government planning to launch a “token mapping” exercise that would indicate which crypto assets it plans to regulate.
Related: Australia Targets Crypto in Regulatory Overhaul
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