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Australia has successfully completed its first foreign exchange transaction using eAUD as part of a live pilot of the country’s potential central bank digital currency (CBDC).
This comes amid growing interest from countries around the world to explore or launch central bank-issued digital currencies.
In a statement from blockchain infrastructure provider Canvas on May 17 local time, crypto fund managers DigitalX and TAF Capital exchanged eAUD for USD Coin (USDC) stablecoin.
Canvas said the transaction was instantaneous and touted it as a success compared to what it called “slow, expensive and error-prone” traditional FX and remittance networks.
FX trading was part of a series of tests currently underway as the country explores possible use cases for CBDC. The pilot program was launched by the Reserve Bank of Australia (RBA) in partnership with the Digital Finance Cooperative Research Center (DFCRC).
The Canvas test explored the use of eAUD in tokenized currency settlement, which may indicate the benefits of using CBDC over fiat currencies and existing settlement platforms.
We’ll demonstrate the benefits of using CBDCs like eAUD in tokenized FX transactions using our privacy-focused Layer 2 Network and blockchain-based financial markets applications. Read more here https://t.co/RPjSF5B8s0
— CANVAS (@canvas_defi) March 6, 2023
The transaction was made in a decentralized application on Canvas “Connect” – layer 2 of Ethereum, which uses StarkWare’s zero-knowledge (ZK) folding technology.
Canvas CEO David Lavecki called the deal “historic” and added that the digital dollar could potentially solve problems in the forex and remittance markets such as “improving transaction times, lowering fees, and enabling more open access.”
Related: BIS Releases Comprehensive White Paper on CBDC Offline Payments
An April pilot test by the Bank of Australia and New Zealand (ANZ) used CBDC to trade carbon credits.
ANZ used eAUD to back its A$DC stablecoin for trading credits on the public blockchain and said the settlement happened “nearly in real time.”
Other use cases being tested include offline payments, distribution, storage, tax automation, use in “secure Web3 trading” and even livestock auctions.
The pilot project started on March 31st and is due to end on May 31st. The report and evaluation of the various use cases is due to be published on June 30th.
