The central bank of Australia is going to check the potential of central bank digital currency by making use of Ethereum’ distributed ledger technology, the second-largest blockchain in the world.

Partnerships with Banks

The Reserve Bank of Australia (RBA) announces new partnerships with National Australia Bank, Commonwealth Bank, ConsenSys, and Perpetual. According to RBA’s official announcement, it will explore “future role for a wholesale CBDC in the Australian payments system.”

The central bank of Australia will focus on the development and research of central bank digital currency for its tokenization by employing Ethereum’s blockchain technology. The major goal of the Reserve Bank of Australia is to target the potential wholesale market participants of the financial markets.

Michele Bullock, Assistant Governor of RBA, said,” With this project we are aiming to explore the implications of a CBDC for efficiency, risk management and innovation in wholesale financial market transactions.”

Wholesale CBDC

Per the official announcement, RBA partners with giant tech firms to study the future of wholesale CBDC in the “Australian payment system.” The latest partnership is part of RBA’s ongoing research process over CBDC. Recently, RBA’s head of payment policy stated on Oct. 14 that it would continue research on CBDC and had no plan to issue digital currency in September. It will not issue digital currency for public use as long as banknotes are available. According to the Australian central bank, the comprehensive report will be issued in 2021 after the successful completion of the project.

It is very big development news for the cryptocurrency industry as the DLT technology of Ethereum will be used by the central bank of Australia.

China is near to launch digital yuan as the research and development work over CBDC has been completed successfully. People’s Bank of China has rolled out various pilot programs that are checking the feasibility and working of central bank digital currency.

The Bahamas officially launched its digital currency, Sand Dollar, to the public last month.