In a significant milestone, Australia has completed its first foreign exchange transaction using eAUD, a central bank digital currency, as part of a live pilot program. This development aligns with the growing global interest in exploring or implementing central bank-issued digital currencies. The transaction was facilitated by Canvas, a blockchain infrastructure provider.
Crypto fund managers DigitalX and TAF Capital participated in the trade, exchanging eAUD for the stablecoin USD Coin (USDC) at a value of $1.00. The transaction was executed seamlessly, with settlement occurring instantly. Canvas hailed this achievement as a triumph over the conventional foreign exchange and remittance networks, which are known for being slow, expensive, and prone to errors.
The successful pilot transaction using eAUD showcases the potential of central bank digital currencies to revolutionize financial systems by offering faster, more efficient, and secure cross-border transactions.
As part of ongoing tests to explore the potential applications of a central bank digital currency (CBDC), Australia conducted an FX trade as a pilot program. The Reserve Bank of Australia (RBA) collaborated with the Digital Finance Cooperative Research Centre (DFCRC) to launch the initiative.
Blockchain infrastructure provider Canvas conducted the test, focusing on the use of eAUD in tokenized FX settlements. The objective was to highlight the advantages of utilizing the CBDC over traditional currencies and settlement platforms. The trade was executed using Canvas’ decentralized app called “Connect,” which operates on Ethereum’s layer 2 and incorporates StarkWare’s zero-knowledge roll-up technology. David Lavecky, CEO of Canvas, emphasized the significance of this trade, describing it as “historic.”
He also highlighted the potential of a digital dollar to address various challenges in the FX and remittance markets, including faster transaction times, reduced fees, and increased accessibility. This successful pilot further underscores the transformative potential of CBDCs in enhancing financial systems.
In an April pilot test conducted by the Australia and New Zealand (ANZ) bank, a central bank digital currency (CBDC) was utilized to trade carbon credits. ANZ employed eAUD to back its A$DC stablecoin, facilitating the trading of credits on a public blockchain. Settlement occurred in nearly real-time, providing efficiency and speed.
The pilot project encompasses other test cases, such as offline payments, distribution, custody, tax automation, utilization in trusted Web3 commerce, and even livestock auctions. The pilot commenced on March 31 and is scheduled to conclude on May 31. An assessment and comprehensive report on the different use cases are expected to be published on June 30.