CBA, ANZ use cases selected in CBDC pilot project

The Commonwealth Bank and ANZ Banking Group have each been selected to demonstrate how a central bank digital currency (CBDC) could be applied across the Australian economy.

It comes as the Reserve Bank (RBA) and the Digital Finance Cooperative Research Centre (DFCRC) pilot project, which is exploring the use cases of CBDCs, released a sample of submissions by industry participants.

The year-long research project received more than 140 use case submissions at the end of last October with a number of use cases selected for participation in the pilot.

CBA’s use case targets businesses and government, seeking to solve the time-consuming and costly process of lodging a business activity statement (BAS) to help them report and make payments for the GST.

CommBank said a CBDC could enable “automatic initiation of payments”, and “remove the need for human intervention to discover, calculate and confirm the required conditions are met before a payment is executed”.

CBA’s managing director of blockchain and digital assets, Sophie Gilder said the bank's “years of applied innovation in blockchain” will help validate the benefits of potential CBDC implementation.

“Through CBA’s experimentation with blockchain technologies since the mid-2010s, we have been closely attuned to the importance of global developments in innovative payment methods, including CBDCs,” Gilder said.

“Two areas where we see the most potential are real asset tokenisation and smart payments, and we have chosen to explore use cases in those domains.

“Our focus on sustainability, productivity and emerging technologies aligns to the goals of the RBA and other industry participants.”

Gilder said it “will take some time” to establish what roles both blockchain and a CBDC will have, noting it’s “essential that Australia continues to build our capabilities in this key area of finance and explore the possibilities of emerging technologies”.

“We are therefore committed to working with industry and organisations like the DFCRC and RBA to advance innovation and deliver real, tangible benefits to our customers and Australia as a whole,” Gilder added.

Gilder has previously said CDBC adoption is “some years away” as it’s “a complex area and central banks need to be measured in their implementation” - with a “lack of clarity in terms of regulation” one of the biggest current obstacles.   

The project update selected a handful of ANZ projects ranging across Super Fund payments, offline payments, and the tokenisation of carbon credits.

ANZ banking services lead Nigel Dobson said the CBDC pilot is “an important research opportunity for the Australian economy and broader payments ecosystem” and that the bank is pleased to “support the RBA as nominated distributor for non-exchange settlement account holders in this pilot program.”

The bank already has high involvement in digital currencies with the execution of the first Australian-bank issued Australian dollar stablecoin payment through a public permissionless blockchain transaction last March.  

Dobson said ANZ “will continue exploring new ways for customers to transact and trade value with new financial market infrastructure.”

The DFCRC and RBA also extended the submission period for CBDC use cases that have the potential to deliver benefits but are not necessarily ready for implementation in the transactional pilot.

As these submissions make up an important aspect of the overall project, entries will now be accepted until the end of this month.