The Reserve Bank of Australia (RBA) has published a report on its two-year research project on Central Bank Wholesale Digital Currency (CBDC), highlighting the benefits of digitization and manual paper banking using distributed ledger technology (DLT). ). …

The report notes the completion of a two-year project called “Project Atom”, which was implemented in collaboration with the Commonwealth Bank of Australia (CBA), National Australia Bank (NAB), Perpetual and ConsenSys, as well as other contributions from King & Wood Mallesons.

Commenting on the Atom project, Michele Bullock, Assistant Governor of the RBA (Financial System), said it “demonstrated the capabilities of wholesale cryptocurrency and asset tokenization to improve efficiency, risk management and innovation in wholesale transactions in financial markets.”

The sentence CBDC refers to the digital currency issued by a central bank for the settlement of transfers and interbank transactions between financial institutions, as opposed to the digital currency of a retail central bank intended for general use.

The CBDC survey was released on December 8, the same day Treasurer and Liberal MP Josh Frydenberg unveiled an ambitious “Payment and Crypto Reform Plan” for financial technology and crypto regulation in Australia. The government has indicated that it supports at least six crypto-reform proposals recommended by a Senate committee and is exploring other proposals.

The project consists of a proof-of-concept (POC) issuance of a “central bank digital currency token” that can be used in the wholesale digital crowd loan market. The test was conducted on the Ethereum-based Distributed Ledger Technology (DLT) platform.

The report found that wholesale CBDCs powered by DLT technology can significantly improve efficiency and reduce operational risk by “replacing the manual and paper-based processes related to the origin and maintenance” of data, transactions, loan payments and settlements, to name a few. who are they.

However, some of the concerns highlighted by the RBA were related to “privacy, finality, throughput, and transaction efficiency” for the use of CBDCs and DLT, particularly in relation to blockchains that are not intended for wholesale purposes.

The POC experimented with a two-tiered CBDC issuance and distribution model, in which the RBA issued digital currency to commercial banks, then opened the banks to “qualified wholesale market participants who sponsored them on the platform…”

On this topic: The Reserve Bank warns Australians not to invest in the crypto-giant

The Reserve Bank of Australia said that it has been exploring the concept of a central bank digital currency since 2018, although its importance has declined several times, but it has been gradually focusing on digital currency since 2020 amid increasing interest from governments around the world, especially with regard to China. … has already launched a series of public trials of the digital yuan.

Bullock noted that the RBA “will continue to research CBDCs as part of its strategic support area for payments development.”

In an interview with the Australian Financial Review on December 8, Sophie Gelder, Head of Blockchain and Digital Assets at CBA, highlighted the “high-level benefits” of using a CBDC, noting that a ledger and compatible payment system could provide greater transparency in payments. … data and version:

I think it’s ‘operational alpha’: more efficiency and transparency, which means you don’t need to audit and report activities separately, and you can have better anti-money laundering [anti-money laundering] procedures because you have really-checked time. ”
“It would be good for the economy and make it easier for regulators to do their job, while being able to program would be a huge step forward and very useful,” she added.

Source: CoinTelegraph