Australia To Discover 14 Use Cases For eAUD

Key Points:

• The Australian dollar’s digital, eAUD, will soon undergo a test phase, according to the Reserve Bank of Australia.
• RBA claims it asked a select group of businesses, including ANZ and Mastercard, to take part in the scheme as it looked into 14 potential uses for the eAUD.
• eAUD’s settlement of foreign currency transactions will be piloted by Canvas Digital.

In the context of countries racing with cross-border currency circulation, central bank digital currency (CBDC) is being considered the best option to realize this ambition. Recently, the Australian dollar’s digital version, known as the eAUD, will soon enter a test phase, according to the Reserve Bank of Australia (RBA).

The RBA announced it had asked a select group of businesses to assist in examining 14 use cases for eAUD in a joint press release with Australia’s Digital Finance Cooperative Research Centre. Companies like ANZ and Mastercard are among them that take part in the initiative.

A small number of industry participants will use a pilot CBDC that is a genuine digital claim on the Reserve Bank to demonstrate possible uses for a CBDC.

The use cases selected for the pilot were picked for a number of reasons, including their potential to shed light on the benefits of a CBDC.

Brad Jones, Assistant Governor (Financial System) at the RBA said:

“We are delighted with the enthusiastic engagement by industry in this important research project. It has also been encouraged that the use case providers that have been invited to participate in the pilot span a wide range of entities in the Australian financial system, from smaller fintechs to large financial institutions. The pilot and overall 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 .”

Use cases range from facilitating offline payments to encrypted invoices for businesses and even livestock auctions.

Canvas Digital, a layer-2 network built on top of Ethereum that leverages zero-knowledge rollups to simplify transactions, was another business mentioned in the release.

The network was developed in collaboration with the Israeli company StarkWare, and Canvas has been asked to test the settlement of foreign exchange transactions using Circle’s USDC stablecoin and the eAUD.

Japan also announced it would launch a CBDC pilot program in April.

Currently, many countries have joined the CBDC trial. China is one of the leading countries with a pilot program of digital yuan (e-CNY).

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