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Australia’s central bank launches digital currency pilot | Crypto

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Australia’s central bank launches digital currency pilot |  Crypto

The Reserve Bank of Australia said a year-long trial would explore “innovative use cases and business models” for the currency.

Australia’s central bank has unveiled plans to examine the potential economic benefits of introducing a central bank digital currency (CBDC).

The Reserve Bank of Australia (RBA) said in a statement on Tuesday that it will conduct a year-long pilot project to explore “innovative use cases and business models” for a CBDC and gain a better understanding of technology considerations. , legal and regulatory.

The RBA will partner with the Digital Finance Cooperative Research Center (DFCRC), a government-backed industry group, for the project, which will invite industry players to develop “specific use cases” that demonstrate how a CBDC could provide innovative payment and settlement services. to households and businesses.

The outcome of the pilot project will inform ongoing research into the desirability and feasibility of a CBDC in Australia, the RBA said.

“This project is an important next step in our research into CBDCs,” RBA Deputy Governor Michele Bullock said in a statement. “We look forward to engaging with a wide range of industry participants to better understand the potential benefits a CBDC could bring to Australia.”

About 100 countries are planning to deploy CBDCs, according to the International Monetary Fund, with a number of jurisdictions, including China and the Bahamas are already distributing their digital currencies to the public.

CBDC supporters say the nascent technology will enable faster and cheaper transactions, promote financial inclusion and give central banks greater flexibility in monetary policy.

While sharing some similarities with cryptocurrencies, CBDCs differ from digital tokens like Bitcoin because they are controlled by a central authority.

Cryptocurrencies operate on peer-to-peer networks known as blockchains, which are decentralized so that no one person or group exercises control.

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