Australians are already testing a CBDC. No one is surprised, given the authoritarian way the government handled the lockdowns. The jury is still out on Central Bank digital currencies, while some authorities consider them problematic and prone to abuse, others are running a pilot program. The Reserve Bank of Australia, the country’s Central Bank, worked with the Digital Finance Cooperative Research Center to produce this white paper detailing the entire project.
In it, we learn that “the pilot CBDC will be called eAUD” and that “eAUD will be a liability of the RBA and denominated in Australian dollars.” The Central Bank of Australia admits that they have been working on the issue for “the last few years” and with this pilot program they aim to determine whether or not a Central Bank digital currency is suitable for Australia.
The Reserve Bank of Australia also confirmed something that everyone suspected but no one knew for sure. This is:
“Central banks globally are actively exploring the potential role, benefits, risks and other implications of CBDC. This has involved the publication of discussion papers, public consultations and the development of proofs of concept and pilots involving CBDC transactions real finances”.
It’s confirmed, governments everywhere are testing surveillance coins.
Everything we know about Australian CBDC
First, the pilot project is already underway and will continue through the middle of next year:
“The project started in July 2022 and is expected to be completed around mid-2023. The project intends to test a pilot general-purpose CBDC issued under the responsibility of the RBA for use in pilot implementations actual services offered by Australian Industry Participants”.
The Central Bank of Australia is trying to find answers to these three questions:
- “What, if any, are the emerging business models and use cases that a CBDC would support that are not effectively supported by existing payment and settlement infrastructures in Australia?”
- “What might be the potential economic benefits of issuing a CBDC in Australia?”
- “What operational, technological, political and regulatory issues might need to be addressed in operating a CBDC in Australia?”
It’s also important to note that the “Central Bank Digital Currency Pilot Project has a national focus in terms of participants and use cases.”
ETH price chart for 09/27/2022 on OkCoin | Source: ETH/USD on TradingView.com
The CBDC pilot project runs on top of Ethereum
Add a new use case to your Ethereum CV. Australia’s extremely centralized CBDC pilot leveraged its technology to have a working model at no additional cost.
“The DFCRC will develop and install the eAUD platform as a private, permissioned implementation of Ethereum (Quorum). The eAUD ledger will operate as a centralized platform, under the management and supervision of the RBA.”
However, there is no guarantee that the Reserve Bank of Australia will continue to use the platform if the Central Bank’s digital currency project takes off. The Central Bank only used Ethereum because it was convenient.
“The project is not evaluating the most appropriate technology to operate a CBDC. The pilot CBDC platform to be implemented is designed to be suitable for the selected use cases, but is not intended to reflect the type of technology that could be used to implement a CBDC, should the decision ever be made to do so.”
Finally, it is worth remembering the words of Matthew Mezinskis. The founder of Porkopolis Economics he said at the Oslo Freedom Forum a few months ago:
“They like to be there to protect the bankers. So they know that if you drain the deposits from the banks and it just goes into a central bank’s CBDC currency, it can’t lend, it can’t lend. Then this is a problem for the banking system. So now they’re trying to figure it out. The common solution is that there will be limits, perhaps the equivalent of $1,000 per CBDC account. They’re trying to figure these things out.”
A pilot program seems like an appropriate way to find these things out.
Featured Image: RBA and DFCRC logos, screenshot from the .pdf| Charts by TradingView
