The Australian digital dollar was utilized in a trade for a U.S. dollar stablecoin utilizing an Ethereum layer 2 blockchains.
Australia has successfully made its initial foreign exchange transaction utilizing eAUD as part of a live pilot for the country’s potential central bank digital currency (CBDC).
It comes amid a rising interest from countries around the world to learn about or launch central bank-published digital currencies.
In a statement, blockchain infrastructure provider Canvas spoke on May 17 local time, and crypto fund managers DigitalX and TAF Capital traded eAUD against the stablecoin USD Coin $1.00.
Canvas reported the deal was settled immediately and touted it as a success over what it called the “ slow, expensive and prone to errors ” traditional FX & remittance networks.
The FX trade was part of a series of tests presently underway as the country explores possible use cases for a CBDC. The pilot program was embarked on by the Reserve Bank of Australia (RBA) in conjunction with the financial exploration institute the Digital Finance Cooperative Research Centre (DFCRC).
Canvas ’ test researched the usage of eAUD in tokenized FX settlements, which could point towards the advantages of utilizing the CBDC over fiat currencies and existing settlement platforms.
The deal was done on a decentralized app on Canvas ’ “ Connect ” — an Ethereum layer 2 that uses StarkWare’s zero-knowledge (ZK) roll-up technology.
Canvas ’ CEO David Lavecky called the trade “ historic ” and added the digital dollar could potentially address challenges in FX and remittance markets similar to “ enhancing transaction times, reducing fees, and providing additional open access. ”
Related: BIS issues comprehensive paper on offline CBDC payments
An April pilot experiment from Australia and New Zealand (ANZ) bank utilized the CBDC to trade carbon credits.
ANZ utilized eAUD to back its A$ DC stablecoin to trade the credits on a public blockchain and reported the settlement happened “ in closer real-time. ”
Different usage cases being tried include offline payments, distribution, custody, tax automation, usage in “ trusted Web3 commerce ” and even livestock auctions.
The pilot started on Mar. 31 and is set to finalize on May 31. A report and assessment of the various usage cases are set to be issued on Jun. 30.
(JESSE COGHLAN, Cointelegraph, 2023)