The best alternative to achieve this goal in the setting of nations competing with cross-border currency circulation is central bank digital currency (CBDC). The Reserve Bank of Australia has announced that the eAUD, the digital equivalent of the Australian dollar, will soon begin a test phase. (RBA).
In a joint press release with Australia's Digital Finance Cooperative Research Centre, the RBA disclosed that it had requested a limited group of companies to help them examine 14 use cases for eAUD. The program is supported by businesses like ANZ and Mastercard.
A pilot CBDC, which is an actual digital claim on the Reserve Bank, will be used by a small group of industry players to illustrate potential applications for CBDCs.
The use cases chosen for the pilot were chosen for a variety of reasons, one of which was their potential to illuminate the advantages of a CBDC.
At the RBA, Brad Jones, Assistant Governor for the Financial System, stated:
"We are thrilled by the industry's active participation in this significant research endeavor. It has also been welcomed that a variety of Australian financial system actors, from minor fintechs to major financial institutions, have been invited to join in the trial as use case suppliers. The pilot and overall research study, which will be carried out concurrently, will serve two purposes: they will help industry gain practical experience, and they will help policy makers better understand how a CBDC might be advantageous for the Australian financial system and economy."
Examples of use cases include simplifying offline payments, creating secure invoices for companies, and even holding cattle auctions.
Another company featured in the publication was Canvas Digital, a layer-2 network built on top of Ethereum that uses zero-knowledge rollups to streamline transactions.
The settlement of foreign exchange transactions utilizing Circle's USDC stablecoin and the eAUD has been asked to be tested by Canvas, a network established in partnership with the Israeli company StarkWare.
Additionally, Japan declared that a CBDC pilot program would begin in April.
Many nations are now participating in the CBDC experiment. One of the pioneering nations with a digital yuan pilot program (e-CNY) is China.
