- Australia’s CBDC will be called eAUD.
- eAUD platform will be launched on an Ethereum forked blockchain and the pilot project on the CBDC is expected to be completed around mid-2023.
Australia has released a white paper detailing fresh details of its central bank digital currency (CBDC) as the race to introduce digital currencies heats up around the world.
The document, released on Monday, comes after the Reserve Bank of Australia (RBA) partnered with the Digital Finance Cooperative Research Center (DFCRC) in August to conduct research and pilot the project. According to the paper, the purpose of the CBDC pilot program is to explore innovative use cases and business models that can be supported by issuing a CBDC.
The newspaper reads:
The project aims to test a general purpose pilot CBDC issued as a liability of the RBA for use in real world, pilot implementations of services offered by Australian industry participants.
The program, expected to complete in mid-2023, will also enable various stakeholders to better understand some of the technological, legal and regulatory considerations associated with a CBDC. As stated in the paper, the pilot CBDC will be called eAUD and will be minted, issued, redeemed and burned by the RBA. On the other hand, the DFCRC will be responsible for the implementation of the CBDC pilot program involving the development and installation of the eAUD platform.
CBDC is launched on Ethereum’s offshoot
The pilot CBDC platform will run on “Quorum” an “Enterprise oriented” fork of the Ethereum blockchain. According to the document, the blockchain was “selected as a widely used and well-understood platform that will facilitate participation in the project by a wide variety of entities.” As a brainchild of JP Morgan, Quorum was developed to satisfy certain needs that were missing from other blockchains, especially for the financial industry.
Quorum uses a “permission management” consensus that helps a designated authority such as the RBA pre-approve the implementation of tasks only to a select set of participants. It also allows an entity to directly manage and distribute digital assets, eliminating the need for a third party. Furthermore, the blockchain eliminates transaction costs and is said to facilitate transactions at a faster rate than Bitcoin and Ethereum.
As in the white paper, “The eAUD platform will have transaction throughput limits (with 2-5 second latency) that are not expected to affect the operation of use cases selected for the pilot project.”
In particular, the eAUD platform will function as a centralized platform, under the management and supervision of the RBA. Approved participants will be able to access the platform through specified application programming interfaces (APIs) and ERC-20 smart contract interface functions.
Meanwhile, despite the Australian government being criticized for inaction when it comes to crypto, it has recently begun to aggressively push for crypto regulation and the introduction of a CBDC to prevent it from falling behind. Recently, Australia’s Treasury launched a “token mapping” exercise aimed at plugging gaps in regulations to pave the way for cryptocurrencies and other digital assets.