The pilot project is expected to take one year and will invite industry participants to develop specific use cases.
Australia will join a growing list of other countries exploring CBDCs at the pilot stage following the project’s completion.
The Reserve Bank of Australia (RBA) said Monday it has teamed up with the Digital Finance Cooperative Research Centre (DFCRC) to begin exploring use cases for a retail central bank-issued digital dollar.
Both parties will embark on a year-long research project encompassing the development of a “limited-scale” CBDC operating in a ring-fenced sandbox, according to a statement.
While extensive research has already been conducted on the viability of digital ledger technology in the country, the RBA and DFCRC said its project would further close knowledge gaps by exploring the potential economic benefits the tech has to offer.
Australia’s digital dollar project will join a growing list of other countries exploring the tech at the pilot stage including France, China, Canada, South Africa and Ghana following completion.
DFCRC is a 10-year, $180 million research program funded by the Australian Government, industry partners and universities via the country’s Cooperative Research Centres Program.
The project, which will explore business models as well as use cases, will also be an opportunity to further understand some of the technological, legal and regulatory considerations associated with an Australian digital dollar, the pair said.
A specific launch date for the project was not given. A spokesperson for the bank and DFCRC did not immediately return requests for comment.
Those interested industry participants will be invited to develop specific use cases showcasing how a CBDC could add value to payment and settlement services for both households and businesses, per the statement.
As part of the process, the central bank and the DFCRC will choose from among a range of those use cases to participate in the pilot, the pair said.
The project’s findings on the viability and assessment of various use cases developed are to be compiled in a report to be published once the year is up.
A separate report is expected to be published in the “next few months” detailing the project’s objectives and approach in greater detail with further information on how industry participants will be able to engage, the pair said.