The Reserve Bank of Australia has confirmed that it has been testing a simulated central bank digital currency to determine its usefulness for intrabank settlement of customer payments. While the central bank continues to question the need for a CBDC in Australia, it apparently plans to continue its experiments, Ledger Insight reports.
RBA’s tests come as other central banks have been ramping up development of their own central bank digital currencies. Sweden, Turkey, Iran, and several other countries have expressed interest in such currencies in recent months.
According to reports, the bank has confirmed that CBDCs could provide intrabank settlement systems with advantages like faster settlement times and reduced transaction costs. Currently banks exchange information continually throughout each day, and it can take time for some transactions to clear. Digital currency transactions take place in real-time and can be settled at any time of the day or night.
The experiments have been conducted using a permissioned Ethereum version, with the central bank’s Innovation Lab simulating token issuance to the country’s banks.