• The Reserve Bank of Australia has identified four key areas that a CBDC could bolster after the completion of its pilot phase.
• Stellar Lumens could play a key role in its launch as it offers improved payment services and infrastructure for tokenization.

The Reserve Bank of Australia has released a 44-page report detailing several use cases that can be improved by launching a central bank digital currency (CBDC). This comes after the end of a pilot phase in which the central bank explored how a CBDC could be used to enhance the functioning of the payment system.

As identified by the bank, the CBDC could help enable complex payments and asset tokenization. By enabling “smarter” payments, a tokenized CBDC allowed for a range of complex payment arrangements not currently supported by existing payment systems.

Findings also noted the ability to combine business logic and CBDC to enable new business models and improvement of the delivery of government programs where beneficiaries were required to meet specific requirements on the use of the benefits.

The CBDC could further enhance resilience and inclusion within the digital economy, promoting innovation in emerging private digital money sectors. The launch of a CBCD could help accelerate financial innovation in a growing ecosystem. The report notes;

A number of submissions highlighted the role that a CBDC could potentially play in promoting interoperability and uniformity of new forms of private digital money, such as tokenised bank deposits and regulated stablecoins. In this role, CBDC could serve a similar function to settlement balances held at the central bank for settling payments made using commercial bank money.

Additionally, submissions highlighted the potential for a programmable CBDC to provide extended functionality in various retail payment applications such as automation utility payments, rental payments, micropayments, etc.

The Atomic settlement was also a major highlight in which participants identified its use cases to settle transactions simultaneously and instantly. A CBDC was also able to offer transparency with participants able to verify various aspects of the CBDC and all transactions on the DLT platform.

Stellar Lumens Role in CBDC Luanch

In the Australia pilot test, Stellar was involved through one of its local partners. One of Stellar Lumens’ major partners Novatti announced it had been approved to join the pilot test for Australia’s Central Bank Digital Currency (CBDC) project.

Read More: Stellar Lumens: Reserve Bank of Australia to test CBDC in billion-$-market on Stellar blockchain to serve millions of people

Ripple rival Stellar Lumens is uniquely placed to be the base layer for the launch of Australia’s CBDC. The platform enables any organization to tokenize real-world assets, where users can create, issue, and manage digital tokens to represent their real-world and fiat assets.

Building the infrastructure needed to launch a CBDC can be expensive and time-consuming. With a global race to launch CBDCs underway, platforms such as Stellar and Ripple are betting on world governments sorting their already built and tested platforms to launch their CBDCs. Furthermore, research has shown that asset tokenization might reach $16.1 trillion by 2030.