The Australian Reserve Bank is using the ETH blockchain for its CBDC project
- Australia’s CBDC will be called eAUD.
- The 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 Whitepaper outlining fresh details on Central Bank Digital Currency (CBDC) as the race to launch digital currencies across the globe intensifies.
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 manage the project’s pilot program. 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 intends to test a general pilot CBDC issued as a responsibility of the RBA for use in real world pilot implementations of services provided by Australian industry participants.
The program, which is expected to be completed by mid-2023, will also enable various stakeholders to better understand some of the technological, legal and regulatory considerations associated with a CBDC. As mentioned 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 implementing the CBDC pilot program which involves the development and installation of the eAUD platform.
CBDC to be launched on Ethereum’s offshoot
The pilot CBDC platform will run on “Quorum” an “Enterprise-focused” fork of the Ethereum blockchain. According to the document, blockchain “was chosen as a widely used and well-understood platform that would facilitate participation in the project by a wide range 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 to pre-authorize the implementation of tasks only to a select set of participants. It also allows an entity to manage and distribute digital assets directly, 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.
According to 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 operate 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 being criticized for inaction when it comes to crypto, the Australian government has recently begun aggressively pushing for crypto regulation and the launch of a CBDC to avoid falling behind. Recently, Australia’s finance minister launched a “token mapping” exercise aimed at plugging regulatory gaps to pave the way for cryptocurrencies and other digital assets.
