Reserve Bank research has found that a digital dollar, issued by the central bank, could make wholesale transactions more efficient and less risky, as authorities advocate for a new form of electronic money.
The Commonwealth Bank and National Australia Bank – which were part of the RBA’s research – also supported the potential of central bank wholesale digital currencies (CBDCs), as the launch of a kind of digital money backed by the RBA is inevitable in the years to come. .
The RBA released the results of a research project on the use of a wholesale CBDC on Wednesday, following a project that also included CBA, NAB and Perpetual to test how a CBDC could be used in a loan. unionized.
CBDCs are a type of digital currency that has gained a lot of attention from central banks around the world as cryptocurrencies have taken off. They would be like digital banknotes, and in Australia the RBA called this concept an “eAUD”.
The RBA’s research, known as “Project Atom, was to develop a” proof of concept “for the issuance of a CBDC that could be used to fund, settle and repay a syndicated loan on a platform. distributed ledger – a type of database shared among members of a network.
He found that using a CBDC could digitize the manual and paper-based processes still common in syndicated loans and make the process more efficient.
“The Atom project has demonstrated the potential of a wholesale CBDC and asset tokenization to improve efficiency, risk management and innovation in wholesale transactions in financial markets,” said the Governor RBA Financial System Assistant Michele Bullock.
The RBA has said it needs to conduct additional research before deciding whether to issue a CBDC, but some experts believe it is inevitable that the RBA will eventually create a new form of electronic money – at least for use in fat.
KPMG Law – KWM’s disruptive innovation professor at UNSW Ross Buckley said that syndicated loans were certainly an area where a CBDC could provide substantial benefits, and that the RBA had made sense to include large banks in the operation of the CBDC.