Top Australia Banks Part of Central Bank Digital Currency Pilot

(Bloomberg) -- ANZ Group Holdings Ltd. and Commonwealth Bank of Australia Ltd. are among leading participants in a pilot project exploring use cases for a central bank digital currency.

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The banks are working with the Reserve Bank of Australia to look at how a CBDC can provide the country with economic benefits, according to an RBA statement Thursday.

“Two areas where we see the most potential are real asset tokenization and smart payments, and we have chosen to explore use cases in those domains,” said Sophie Gilder, Commonwealth Bank managing director for blockchain and digital assets. “It is essential that Australia continues to build our capabilities in this key area of finance and explore the possibilities of emerging technologies.”

Central banks around the world are exploring the future of digital-asset technology, with the speed and cost of real time interbank payments a key area of interest. A report on the Australian project is expected to be published around the middle of the year.

“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,” said RBA Assistant Governor Brad Jones.

Some 114 countries — representing over 95% of global gross domestic product — are exploring a CBDC and 11 nations have fully launched a digital currency, according to the Atlantic Council.

In the US, the Treasury Department will lead a new senior-level working group that will soon start regular talks on the possible launch of a digital dollar. Hundreds of millions of consumers have already used the digital yuan during trials in China.

CBDCs, like bank notes and coins, would be the direct liability of a central bank, carrying its guarantee.

For the Australian pilot, ANZ will distribute the CBDC to selected participants on behalf of the RBA and will also test three use cases across pension fund payments, offline payments and the tokenization of carbon credits.

Here’s a list of the cases and providers who have been invited to participate in the pilot:

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