RBA partners with CBA, NAB for digital currency project

The Reserve Bank will partner with the Commonwealth Bank, the National Australia Bank, Perpetual and ConsenSys Software on a collaborative project to explore the use and implications of a wholesale form of central bank digital currency (CBDC), using distributed ledger technology (DLT). This is part of ongoing research at the Reserve Bank on wholesale CBDC.

The project involves the development of a proof of concept (POC) for the issuance of a tokenised form of CBDC that wholesale market participants can use for the funding, settlement and repayment of a tokenised syndicated loan on an Ethereum-based DLT platform.

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

Assistant Governor (Financial System) Michele Bullock said the project aims 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,” said Bullock.

The project will be completed around the end of 2020, with the parties to publish a report on the project’s main findings during the first half of 2021.

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