Australia’s CBDC lead is focused on more than just solving current issues

The executive leading Australia’s central bank digital currency (CBDC) pilot believes that while CBDCs may not address current problems, they could be the solution to unforeseen challenges in the future. Dilip Rao, the former Ripple executive who is now heading the CBDC research project in Australia, stated that a central bank-issued digital currency could have applications that have not yet been considered. Rao, who serves as the research program director at the Digital Finance Cooperative Research Centre, is working with the Reserve Bank to explore potential use cases for a CBDC. However, he acknowledged that the question of why individuals would want or need to use a CBDC is still unanswered. One potential future use, according to Rao, is for large institutions to trade tokenized assets on marketplaces, as they may prefer the use of a CBDC to mitigate risks. The CBDC pilot in Australia is currently examining 14 possible use cases, and the results of these tests, which will be released in the future, will determine which ones require further exploration. Rao emphasized that a CBDC is not necessary in every use case and that widespread adoption would depend on people seeing value in it. One of the obstacles for a CBDC in Australia is the need for legislative changes, which would require public support. Rao stated that politicians would need to be on board, and public consultation would be necessary to address the problems that people want to solve.