Banking majors Commonwealth Bank, ANZ, payment giant Mastercard are among the firms that have come onboard for a central bank digital currency (CBDC) pilot in Australia, which looks to assess the currency’s economic viability.

In association with the Digital Finance Cooperative Research Centre (DFCRC), the Reserve Bank of Australia (RBA) will conduct trials for the eAUD over the next few months.

The central bank has announced 14 projects, which will test use cases for the digital currency.

Both large financial providers and smaller fintech firms have been invited to participate in these trials, which will cover diverse areas including use of CBDC for offline transactions. 

The test will also explore other use cases of eAUD such as
corporate bond settlement, high quality liquid assets securities trading, tokenised FX settlement, among others.

Also to be explored are use of eAUD in funds custody and livestock auctions.

DFCRC programme director – CBDC Dilip Rao stated: “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.

“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.”

The project’s report is scheduled to be released by mid-2023.

RBA assistant governor (Financial System) Brad Jones said: “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.”

Last month, the Bank of England and UK Treasury announced a formal consultation, open until 7 June 2023, for the launch of digital pound.

Late last year, India too unveiled plans for a digital rupee pilot.