Reserve

Bank AI

Million

<ul class="list-ic vertical"> 
 <li> 1 <a>The central bank of Australia brought the result of research started last year along with DFCRC.&nbsp;</a> </li> 
 <li> 2 <a>CBDC holds the potential to resolve many issues but more concrete reasons are required before the launch.&nbsp;</a> </li> 
</ul> 
The central bank digital currency (CBDC) emerges as an initiative that central banks across the countries are looking out for opportunities. The Australian central bank was carrying out research and study for the digital currency in the country. The bank recently published a report having key findings of the CBDC pilot project.&nbsp; 
In the August 23 released report, the bank found that the CBDC has the potential to solve several crucial issues that the existing financial systems lack. The digital currency is capable of handling complex payments and enabling tokenization. However, it also noted that the decision to develop a digital currency may take a long time since several issues were unresolved.&nbsp; 
The Reserve Bank of Australia (RBA) and the Digital Financial Cooperative Research Centre (DFCRC) came together to start researching digital currency in 2022.&nbsp; 
The DFCRC, a program with a funding of 180 Million Australian dollars (equivalent to US$124.3 Million), is backed by a consortium of industry partners, universities, and the Australian Government. Its primary objective is to delve into the potential that stems from asset digitization and explore the use cases of Central Bank Digital Currencies (CBDCs). 
<h2 class="wp-block-heading" id="strong-report-finds-cbdc-can-resolve-these-issues-strong">Report Finds CBDC Can Resolve These Issues</h2> 
According to the research, there are four domains where the central bank’s digital currency can play a crucial role.&nbsp; 
<div class="wp-block-image"> 
 <figure class="aligncenter is-resized"> 
 <img decoding="async" src="https://lh3.googleusercontent.com/g6DbLt5vrTtgFt5ZAqBCDEPcTc6AOdkshxixPw6aEtSnXGdrxVFPV-5I9TkDOANRJqj9l0DIhkasLHoI4i3pEYrqaYGAvyWM37PA_AALQhUZLIbtk9bwgYay2Rnjy81rguAepZRe0pqvh0V4PnDe2wo" alt="Australian Central Bank Sees Potential in CBDC, But Launch Could Delay" style="width: 100%;height:622px" width="986" height="622"> 
 <figcaption class="wp-element-caption">
 Source: Reserve Bank of Australia (RBA) 
 </figcaption> 
 </figure> 
</div> 
Among these solutions, it includes “smart payment” solutions that CBDC can provide. The submissions emphasize that a tokenized digital currency (CBDC) could enable intricate payment methods beyond current systems. By programming smart contracts, payments could be automatically triggered based on specific conditions, facilitating complex transactions along with reducing costs and transaction risks. 
The notion for CBDCs also emerged that they will be supporting innovation in financial markets. Industry players are enthusiastic about using distributed ledger technology (DLT) platforms to tokenize financial and tangible assets. <a href="https://www.thecoinrepublic.com/2021/09/02/australia-singapore-malaysia-and-south-africa-join-hands-on-a-collaborative-cbdc-experiment/" rel="noopener noreferrer nofollow">Central Bank Digital Currencies (CBDCs)</a> are being used to enable quick transaction settlements. This initiative aims to tokenize assets like carbon credits and invoices using CBDCs for instant settlement, potentially improving efficiency, transparency, liquidity, and market accessibility. 
CBDC could promote “digital money innovation” as it enhances consistency among private digital currencies like tokenized bank deposits and reliable asset-backed stablecoins. It might function similarly to bank-held settlement balances, and CBDC-backed stablecoins could compete effectively with regulated digital currencies. 
In addition, the “resilience and inclusion” through the digital currency would be easier. CBDC could strengthen the payment system by providing households and businesses an alternative for payments, even offline during disruptions. It could benefit specific groups like travelers, foreign students, and domestic violence survivors who face banking challenges. 
However, the report also highlighted several issues which indicate the launch of CBDC is not taking place anytime soon. It says that “the project did not set out to provide a complete assessment of the costs, benefits, risks and other implications of introducing a CBDC. Instead, it was more narrowly focused on exploring how a CBDC could be used by industry to enhance the functioning of the payments system.”

Australian Central Bank Sees Potential in CBDC, But Launch Could Delay

Table of Contents

Thecoinrepublic.com

Other articles published on Aug 23, 2023

Shytoshi Kusama Unveils Shibarium’s Upgraded Feature

Trading at Light Speed: How Generative AI Delivers Split-Second Decisions

How the SEC Lawsuit Cost Ripple Billions and What Could've Been!

DOGE and SHIB Price Analysis for August 23

PayPal launches USDC competitor, investors bullish on this new project presale in 2023

Identiv and collectID Power the Future of Sport Team Fan Engagement

Join our free newsletter for daily crypto updates!