Australia to Benefit from Ethereum Digital Currency Project

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The Bank of Australia, the country’s central bank, is exploring the use of the central bank digital currency (CBDC), a digital fiat currency issued by the state. The central bank is partnering with Commonwealth Bank, National Australia Bank, Perpetual and ConsenSys Software on the project.

Central bank digital currencies have been on the agenda lately. The European Union offers the public a survey about a decentralized digital euro; China recently distributed digital currency worth 10 million yuan to its citizens. Jerome Powell discussed the US digital dollar strategy at the IMF. Australia also doesn’t want to be left behind.

“With this project, we aim to investigate the effects of CBDC in terms of efficiency, risk management and innovation in wholesale market transactions,” said Michele Bullock, deputy central bank director of Australia.

The current project will be completed by the end of this year and the main findings will be announced in the first half of 2021.

Australia plans to use an Ethereum-based platform in its digital currency project
The project will also develop a proof-of-concept for a tokenized variant of a CBDC. In other words, it will be a digital representation of a real, tradable asset. It is envisaged that this CBDC token can be used in areas such as financing, closing and repaying a tokenized loan on an anonymous Ethereum-based platform.

Despite this development, Australia has yet to promise a CBDC. “While the use of CBDC in these markets remains an open question, we are pleased to collaborate with industry partners to investigate whether CBDC has a future role in the Australian payment system,” said Bullock.

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