Australia's Central Bank To Explore Potential Economic Benefits Of Digital Currency

Australia's central bank has launched a one-year research program for a central bank digital currency (CBDC) to find out the potential economic benefits it might bring.

What Happened: The Reserve Bank of Australia (RBA) said it has partnered with a government-backed industry group, the Digital Finance Cooperative Research Centre (DFCRC), for the research program for a CBDC.

The central bank said that the project would seek to identify innovative use cases and business models that the issuance of a CBDC could support.

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It added that the research would help the bank better understand its technological, legal and regulatory considerations for a digital currency similar to cryptocurrencies like Bitcoin BTC/USD, Ethereum ETH/USD and Dogecoin DOGE/USD. 

"The project, which is expected to take about a year to complete, will involve the development of a limited-scale CBDC pilot that will operate in a ring-fenced environment for a period of time and is intended to involve a pilot CBDC that is a real claim on the Reserve Bank," the bank said in a statement.

Interested industry participants would be invited to develop specific use cases that demonstrate how a CBDC could be used to provide innovative and value-added payment and settlement services to households and businesses, it added.

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