- A new report by Australia has identified key opportunities with the launch of a central bank digital currency (CBDC).
- The pilot CBDC involved key partners of Stellar Lumens and with the platform offering tailored infrastructure, it could be chosen as the base layer for the launch.
The Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC) have released a new report highlighting the results of the Central Bank Digital Currency (CBDC) Pilot in Australia. The study sought to find out how efficient the launch of the CBDC dubbed ‘eAUD’ would be and its usefulness in the financial system.
The report highlights two key use cases; programmability and settlement. For the most part, the test found that a CBDC would aid in removing intermediaries. This would be achieved by offering a system that was not central and that would offer an instant and transparent settlement. Programmability further allowed for automation and settlement in a timely and instant manner. Furthermore, A programmable CBDC provides extended functionality in various retail payment applications such as automation utility payments, rental payments, micropayments, etc.
The test identified other benefits such as guaranteed value, direct control without intermediaries, atomic settlement, and transparency. However, the researchers found that tokenized bank deposits and stablecoins can provide many of the same benefits.
The deployment of the pilot was on its own private Ethereum blockchain ledger, which did not support smart contracts. The alternatives are to issue CBDC directly using industry platforms or to allow industry smart contracts to be deployed onto the CBDC ledger.
Can Stellar Lumens be the Base Layer?
As CNF reported earlier, one of Stellar Lumen’s partners was involved in the pilot test of the CBDC. One of Stellar Lumens’ major partners Novatti announced it had been approved to join the pilot test for Australia’s Central Bank Digital Currency (CBDC) project earlier this year. Novatti Group believes that stablecoins present a massive opportunity for businesses and corporations to transfer money instantly and at a low cost. Earlier this year, Novatti decided to issue its AUDC stablecoin of Ripple XRP ledger and the Stellar blockchain.
Related: Ripple and Stellar working with Novatti Group to build AUD-pegged stablecoin
As CNF has highlighted, Ripple rival Stellar Lumens is uniquely placed to be the base layer for the launch of the Australian CBDC. The platform enables any organization to tokenize real-world assets, where users can create, issue, and manage digital tokens to represent their real-world and fiat assets. Some governments have discovered that developing a CBDC from scratch can be expensive and time-consuming, resulting in building on top of other blockchain projects that are well-established and tested. Stellar Lumens is one of the few projects that have created a successful infrastructure and ecosystem suited for this.
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