RBA names three banks among trial partners working on digital Aussie dollar

Work on a digital version of the Aussie is advancing with the selection of trial partners to try out digital dollars by the Reserve Bank of Australia (RBS).

Project Acacia is a joint research project of the RBA and Digital Finance Co-operative Research Centre (DFCRC). It is also supported by the Australian Securities and Investments Commission (ASIC), Australian Prudential Regulation Authority (APRA) and Treasury.

RBA assistant governor Brad Jones says ensuring Australian monetary policy is fit-for-purpose in the digital age is a strategic priority for them.

“Project Acacia represents an opportunity for further collaborative exploration on tokenised asset markets and the future of money by the public and private sectors in Australia,” he says.

“The use cases selected in this project will help us to better understand how innovations in central bank and private digital money, alongside payments infrastructure, might help to uplift the functioning of wholesale financial markets in Australia.”

It says 24 innovative use cases from organisations ranging from local fintechs to major banks have been conditionally selected for the trials.

Of these, 19 pilot use cases will involve real money and real asset transactions and the remainder will involve proof-of-concept use cases involving simulated transactions.

The use cases involve different asset classes like fixed income, private markets, trade receivables and carbon credits.

Trial participants include ANZ, Commonwealth Bank and Westpac, Canvas and the Australian Bond Exchange. (List at the bottom of this story)

The trials will run for six months, and the trial partners will be given “regulatory relief”, the RBA says.

SUPPORT FOR PROJECT

ASIC Commissioner Kate O’Rourke says they “support” the development of new technologies, including tokenisation and distributed ledgers.

“ASIC sees useful applications for the technologies underlying digital assets in wholesale markets,” she says.

“The relief from regulatory requirements will allow these technologies to be sensibly tested — to explore opportunities and identify and tackle risks.”

Professor Talis Putnins, chief scientist at DFCRC, says it is “great” to see collaboration from so many parts of the industry; from small fintechs to large banks to financial regulators.

“The real money settlement models being tested, including issuing pilot wholesale CBDC on third-party platforms, reflects another world-first for Australia,” he says.

“The project is of strategic importance to the DFCRC because, as a co-operative research centre, our focus is on bringing together key groups to unlock the large economic potential of digital finance innovation in Australia. “

Prof Putnins says recent research values the potential economic gains in markets and cross-border payments to be around $19 billion a year.

“Project Acacia is a significant step towards realising these gains by providing evidence on the forms of money and settlement models that best enable tokenised real-world asset markets,” he says.