The Reserve Bank of Australia is working to identify business models and uses for a central bank digital currency, or eAUD, and is likely to conduct a pilot early next year.
The project, which began in July, will help “further understanding of some of the technological, legal and regulatory considerations” associated with a central bank digital currency, the RBA and the Digital Finance Cooperative Research Centre said in a white paper on Monday.
The findings will be published at the conclusion of the project, around mid-2023. The research implies no commitment from the RBA to issue a central bank digital currency, it said.
Central banks worldwide are acting swiftly to ensure they don’t fall behind as money edges towards its biggest reinvention in centuries with alternative concepts such as cryptocurrencies taking hold. That new technology, as well as events such as the coronavirus pandemic, are among forces pushing consumers to go cashless.
The RBA is seeking submissions from industry participants ranging from financial institutions, fintechs, public sector agencies and technology providers. It is also engaging with regulators to work through any regulatory implications.
The entire crypto investment space, from established names such as bitcoin to stablecoins to non-fungible tokens (NFTs), is under increasing regulatory focus.
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The federal government has pledged to “token map” the Australian cryptocurrency asset sector as a first step towards fresh regulation in the cryptocurrencies area, which the tax office estimates more than one million people have “interacted” with since 2018.
This year, the Bank for International Settlements – the world’s peak central bank – labelled bitcoin and other cryptocurrencies as speculative assets used by organised crime and a waste of energy.
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