Australia Conducts First FX Transaction Using CBDC
Australia has conducted its first foreign exchange transaction using eAUD, the potential central bank digital currency (CBDC) of the country. This transaction was part of a live pilot program aimed at exploring the feasibility of a CBDC.
Crypto fund managers DigitalX and TAF Capital traded eAUD against the stablecoin USD Coin (USDC) on May 17, facilitated by blockchain infrastructure provider Canvas. The transaction was settled instantly, highlighting the advantages of CBDCs over traditional foreign exchange and remittance networks, which are often slow, costly, and prone to errors.
The Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC) launched the pilot program to investigate various use cases for a CBDC. Canvas's test specifically focused on tokenized foreign exchange settlements using eAUD, demonstrating the potential benefits of CBDCs compared to fiat currencies and existing settlement platforms. The transaction took place on the decentralized app "Connect" on Canvas, which utilizes Ethereum's layer 2 solution called Connect and employs StarkWare's zero-knowledge (ZK) roll-up technology.
According to Canvas CEO David Lavecky, this trade is deemed significant, and he expressed the potential of digital dollars in addressing challenges within foreign exchange (FX) and remittance markets. He mentioned potential benefits such as improved transaction times, reduced fees, and increased accessibility.
In April, the ANZ bank conducted a pilot test involving the central bank digital currency (CBDC) for trading carbon credits. Using the eAUD to back the A$DC stablecoin, ANZ executed the trade on a public blockchain, reporting settlement times occurring in near real-time.
Various other use cases are currently under testing, including offline payments, distribution, custody, tax automation, integration into trusted Web3 commerce, and even livestock auctions. The pilot program commenced on March 31 and is scheduled to conclude on May 31.
Sources:
https://cointelegraph.com/news/australia-uses-cbdc-in-fx-transaction-pilot-test