Australia marks first FX transaction using a CBDC as eAUD pilot continues

May 18, 2023 Coin Telegraph

Australia

The Australian digital dollar was used in a trade for a U.S. dollar stablecoin using an Ethereum layer 2 blockchain.

Australia has successfully made its first foreign exchange transaction using eAUD as part of a live pilot for the country’s potential central bank digital currency (CBDC).

It comes amid a rising interest from countries around the world to learn about or launch central bank-issued digital currencies.

In a statement, blockchain infrastructure provider Canvas said on May 17 local time, crypto fund managers DigitalX and TAF Capital traded eAUD against the stablecoin USD Coin (USDC).

Canvas reported the transaction was settled instantly and touted it as a success over what it called the “slow, expensive and prone to errors” traditional FX and remittance networks.

The FX trade was part of a series of tests currently underway as the country explores possible use cases for a CBDC. The pilot program was launched by the Reserve Bank of Australia (RBA) in conjunction with the financial research institute the Digital Finance Cooperative Research Centre (DFCRC).

Canvas’ test explored use of eAUD in tokenized FX settlements, which could point towards the benefits of using the CBDC over fiat currencies and existing settlement platforms.

We’ll demonstrate the benefits of using CBDCs like eAUD in tokenized FX transactions using our privacy-focused Layer 2 Network and blockchain-based financial markets applications. Read more here https://t.co/RPjSF5B8s0
— CANVAS (@canvas_defi) March 6, 2023

The transaction was done on a decentralized app on Canvas’ “Connect” — an Ethereum layer 2 that uses StarkWare’s zero-knowledge (ZK) roll-up technology.

Canvas’ CEO David Lavecky called the trade “historic” and added the digital dollar could potentially address challenges in FX and remittance markets such as “improving transaction times, reducing fees and providing more open access.”

An April pilot test from Australia and New Zealand (ANZ) bank used the CBDC to trade carbon credits.

ANZ used eAUD to back its A$DC stablecoin to trade the credits on a public blockchain and reported the settlement happened “in near real-time.”

Other use cases being tested include offline payments, distribution, custody, tax automation, use in “trusted Web3 commerce” and even livestock auctions.

The pilot started on Mar. 31 and is set to finish on May 31. A report and assessment of the various use cases are set to be published on Jun. 30.

Magazine: Here’s how Ethereum’s ZK-rollups can become interoperable

Australian central bank to launch ‘live pilot’ of CBDC in coming months

March 1, 2023 Coin Telegraph

Australia

The use cases for the CBDC ranged from offline payments to "trusted Web3 commerce" and financial industry participants were invited to undertake a live pilot.

Australia's central bank is set to launch a "live pilot" of a Central Bank Digital Currency (CBDC) "in the coming months," according to a joint statement from the Reserve Bank of Australia (RBA) and Digital Finance CRC (DFCRC), an Australian financial research institute.

The RBA said on Mar. 2 local time said it was collaborating with the DFCRC on a research project to "explore potential use cases and economic benefits of a central bank digital currency (CBDC) in Australia."

The RBA announced the initial stage of the research project involved the selection of several financial industry participants to demonstrate potential use cases of the CBDC, which will provide possible benefits of a CBDC.

This will involve a"live pilot," which the RBA says will take place over the coming months.

Use cases being piloted will include offline payments, tax automation and a CBDC for "trusted Web3 commerce," while participants of the trial range from banks, such as Commonwealth Bank and Australia and New Zealand (ANZ) bank to payment providers such as Mastercard.

*Selected CBDC use cases and the providers of each. Source: RBA*

Brad Jones, Assistant Governor (Financial System) at the RBA said, "The pilot and broader research study that will be conducted in parallel will serve two ends – it will contribute to hands-on learning by industry, and it will add to policy makers’ understanding of how a CBDC could potentially benefit the Australian financial system and economy.”

This is a developing story, and further information will be added as it becomes available.

BIS marks CBDC pilot as ‘successful’ with $22M transacted

September 28, 2022 Coin Telegraph

<div>BIS marks CBDC pilot as 'successful' with M transacted</div>

BIS

Over $12 million in value was issued in the pilot with commercial and central banks in Hong Kong, Thailand, the UAE and China taking part.

A multi-jurisdictional Central Bank Digital Currency (CBDC) pilot has been marked “successful” by the Bank for International Settlements (BIS) after a month-long test phase that facilitated $22 million worth of real-value cross-border transactions.

The central banks of Hong Kong, Thailand, China and the United Arab Emirates (UAE) took part in the pilot program along with 20 commercial banks from those regions.

More than $12 million worth of value was issued onto the test platform, which facilitated 164 foreign exchange transactions and cross-border payments between the participating firms totaling over $22 million worth of value according to a Tuesday LinkedIn post from the BIS.

*Graphic from the BIS on the CBDC pilot. Source:* *LinkedIn*

Daniel Eidan an advisor and solution architect at the BIS said the pilot focused on wholesale CBDC cross-border payments and the role the central banks have on the platform, adding “we will likely consider more commercial aspects in the future stages of our work.”

The platform, known as “mBridge” short for Multiple CBDC (mCBDC) Bridge is a part of Project Inthanon-LionRock, a distributed ledger technology (DLT) CBDC cross-border payment project launched initially in Sept. 2019 involving the Thai and Hong Kong central banks.

With the first pilot of the platform now completed the project has moved into its third and final stage before a minimum version of the product with only the platform's core functionality is put to market.

A fully-functional CBDC cross payments platform will only be ready after revisions are made taking into account the feedback from the minimum version, according to a Sept. 2021 BIS report.

The BIS added that a detailed progress report on mBridge will be released in October which will discuss technical design, legal, policy and regulatory considerations along with a future roadmap of mBridge.

A June report by the BIS revealed around 90% of central banks are investigating the adoption of CBDCs. Currently, 11 CBDCs have launched, 15 are in a pilot stage and 26 are in development according to the CBDC tracker from think tank Atlantic Council.