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RBA urges crypto community to give suggestion for CBDC

The Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC) are asking industry players to provide suggestions on use cases for central bank digital currency (CBDC) in order to conduct their trial.

The Reserve Bank of Australia (RBA) expects that the digital currency, which will be used in the trial and given the name “eAUD,” will exhibit new possibilities in terms of cost, speed, and quality results.

In a white paper that was published on Monday, it cited potential uses such as the atomic settlement of transactions involving tokenized assets, multi-party or syndicated transactions, escrowed transactions, enabling conditional or programmable transactions, as a verifiable reserve asset to reduce counterparty risks, and for 24/7 operations. Among the other potential uses it mentioned was the ability to enable programmable or conditional transactions.

The Reserve Bank of Australia (RBA) won’t pay any interest on any holdings

The Reserve Bank of Australia (RBA) won't pay any interest on any holdings
The Reserve Bank of Australia (RBA) won’t pay any interest on any holdings

During the course of the pilot, the RBA will be liable for any electronic AUDs that are issued; these eAUDs will be denominated in Australian dollars. The Reserve Bank of Australia (RBA) will not pay any interest on any holdings of electronic Australian dollar currency, and the quantity that will be released will be set by the RBA taking into consideration the needs of chosen use case providers.

Only businesses that are registered in Australia and persons who are residents of Australia will be permitted to possess eAUD, and in order to participate, holders of eAUD will need to be asked to participate, authorised, and KYC-ed.

The white paper includes a timetable that details when various activities will take place, and one of those activities is the pilot programme, which is scheduled to take place between January and April of 2023. It is now engaging with industry participants on the design and utilisation of the CBDC pilot, and the submission deadline for expressions of interest is the 31st of October. Following the announcement in December of the use cases that were chosen for the pilot, the testing phase of the project will take place from January to April of the following year. After the completion of the pilot, it will issue a report in the middle of 2023 that outlines the results in full.

At the beginning of August, the RBA made the announcement of a new research project that will investigate potential applications of CBDC. With this move, the RBA joined the ranks of nations such as China, Thailand, the Philippines, Jamaica, and Sweden, all of which currently have or intend to have CBDC pilots within the next year.

The People’s Bank of China made the announcement the week before last that it will be expanding the test run of e-CNY to include seven other regions, including Guangdong and Sichuan.

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Reporter
Jeewan Singh is CryptoShrypto’s content writer and a seasoned writer with over two years of experience in writing about Indian Securities Market. Jeewan's participation in Blockchain and Cryptocurrency started in late 2020, and he hasn't looked back since. The technical and economic outcomes of cryptocurrency are what spark his curiosity, and he keeps one eye on the market.
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