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Australia’s Central Bank Exploring Digital Currency and Ethereum-Based Loans Platform

November 03, 2020

Australia’s central bank is partnering with the Ethereum development studio ConsenSys as it continues to explore the impact and effectiveness of central bank digital currencies (CBDC).

In a press release, the Reserve Bank of Australia (RBA) says it plans to test a proof-of-concept (POC) that will create a tokenized version of fiat currency and repay a loan using an Ethereum-based platform.

“The POC will be used to explore the implications of ‘atomic’ delivery-versus-payment settlement on a DLT (distributed ledger technology) platform as well as other potential programmability and automation features of tokenised CBDC and financial assets.”

RBA financial system assistant governor Michelle Bullock says the project is designed to help gauge the benefits of a digital Australian dollar.

“With this project we are aiming to explore the implications of a CBDC for efficiency, risk management and innovation in wholesale financial market transactions.

While the case for the use of a CBDC in these markets remains an open question, we are pleased to be collaborating with industry partners to explore if there is a future role for a wholesale CBDC in the Australian payments system.”

Commonwealth Bank, National Australia Bank, and the Australian investment and trustee group Perpetual are also taking part in the proof-of-concept.

The project will likely be completed by the end of the year, with a report on the results coming in the first half of 2021.

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