What exactly is a Central Bank Digital Currency (CBDC)? A CBDC is virtual money backed and issued by a central bank. As cryptocurrencies and stablecoins have become more popular, the world’s central banks have realized that they need to provide an alternative—or let the future of money pass them by.
Australia
Project Name – eAUD
The Reserve Bank of Australia (RBA) is actively exploring the use of a wholesale eAUD through its involvement in Project Atom and Project Dunbar.
Timeline
The Reserve Bank of Australia announced in November 2020 that they have partnered with the Commonwealth Bank of Australia, National Australia Bank, Perpetual and ConsenSys softwares to explore a distributed ledger technology (DLT) based central bank digital currency (CBDC). This partnership will involve the creation of a proof-of-concept “for the issuance of a tokenized form of CBDC that can be used by wholesale market participants for the funding, settlement and repayment of a tokenized syndicated loan on an Ethereum-based DLT platform.” This was labeled as “Project Atom.” Project Atom came to a conclusion in 2021, and the report provided technical and policy recommendations for wholesale CBDC payments.
Cross-border Projects
In 2021-22, Australia also participated in Project Dunbar. In 2021, the Reserve Bank of Australia also announced that it would collaborate with Digital Finance CRC on long term research on CBDCs.
Project Dunbar
The central banks of Australia, Singapore, Malaysia, and South Africa, in collaboration with the BIS, began exploring a platform for international settlements through Project Dunbar. As of March 2022, the project was successful in building two prototypes to allow international settlements across multiple CBDCs.