The digital Australian dollar (eAUD) enters the pilot phase, testing foreign exchange transactions using USDC.

The Reserve Bank of Australia (RBA) has announced that it is collaborating with the Digital Finance Cooperative Research Centre (DFCRC) on a research project to explore the potential use cases and economic benefits of a central bank digital currency (CBDC). The digital Australian dollar, eAUD, is set to enter a pilot phase, marking a significant step towards CBDC implementation.

Digital Finance Cooperative Research Centre DFCRC

DFCRC is a 10-year, $180 million research project funded by industry partners, universities, and the Australian government through the Cooperative Research Centre program. The mission of DFCRC is to bring together stakeholders from the financial industry, academia, and regulatory bodies to develop and leverage opportunities brought by the next transformation of financial markets, namely the digitization of assets. The Reserve Bank of Australia is a partner in DFCRC and leverages its participation to support its strategic focus on payment development, including research on CBDC.

Participants Announced

The Reserve Bank of Australia has announced the list of participants, including major Australian banks ANZ, Commonwealth Bank, the Australian Bond Exchange, credit card giant Mastercard, and Canvas Digital. The use cases range from common offline payments, asset settlements, and forex trading to livestock auctions, automated consumption tax, and more, covering various aspects.

Among them, Canvas Digital conducts foreign exchange transactions on its Canvas Connect platform. Connect offers privacy, speed, and low transaction costs on the public Ethereum blockchain, and eliminates inefficiencies and settlement risks in the forex market using ZK Layer 2 technology. They conduct forex trading experiments by exchanging Circle's USDC stablecoin and eAUD.

Brad Jones, Assistant Governor of the Reserve Bank of Australia's Financial System, stated:

We are pleased with the industry's active participation in this important research project. It is also encouraging that the participants invited to the pilot cover operators in the Australian financial system, ranging from smaller fintech companies to large financial institutions. This will contribute to industry learning in practice and enhance policymakers' understanding of the potential benefits of CBDC for the Australian financial system and economy.

The trial program is expected to conclude by the end of May, with the final research report due by the end of June.