The Reserve Bank of Australia has entered into a partnership to study CBDCs.

The project intends to assess the appropriateness of issuing a CBDC in view of the situation in the Australian payments market.

According to an announcement on 2 November, the Reserve Bank of Australia (RBA) will work with the Commonwealth Bank, National Australia Bank, Perpetual Financial Services Company and ConsenSys software company on a project to assess the potential use of a wholesale CBDC in the country, using „Ethereum-based distributed registry technology“.

The RBA said it will develop a proof-of-concept for „the release of a tokenised form of CBDC“. The RBA specifically mentioned that the project aims to evaluate the issuance of tokenised loans on a DLT and to explore the implications of purchasing securities through atomic cross-chain swaps.

RBA Assistant Governor Michele Bullock said:

„With this project we intend to explore the implications of a CBDC on efficiency, risk management and innovation in wholesale transactions in financial markets. […]

While the opportunity to use a CBDC in these markets remains an open question, we are pleased to work with our industry partners to assess whether there is a future role for a wholesale CBDC in the Australian payments system.

However, the RBA seems to be turning the tide when it comes to CBDCs. On 14 October, the central bank’s head of payments policy stated that the RBA would continue to research CBDCs, although the Reserve Bank itself pointed out in September that there were no strong policy arguments for issuing one.

As an alternative to issuing a CBDC, the bank highlighted the success of the country’s efficient New Payments Platform and said it was willing to provide access to fiat notes „as long as Australians wish to continue using them“.

The central bank stated that the project will be completed by the end of the year and that a report will be published in 2021.