In a recent central bank digital currency (CBDC) pilot, The Reserve Bank of Australia identified key areas where tokenized money could benefit businesses and households. Instead of testing technology, the project explored how CBDCs could back stablecoins and be used to settle automated transactions.
The research found that smart contracts could execute multi-party or multi-stage payments automatically based on predefined conditions. Smart contracts could incorporate business logic to pay bills, micropayments, and disability grants.
Australia Crypto Owners Can Use CBDC-Backed Stablecoins
Offline payments in a government-issued currency could supply aid when natural disasters damage critical infrastructure. ANZ Bank tested dispensing cash through a near-field link with a mobile device holding the CBDC.
Additionally, the CBDC could be used to back private stablecoins competing with digital money issued by other institutions. In doing so, the asset would absorb the protections a CBDC could offer without being a liability to the central bank.
Explore the exciting world of blockchain tokenization here.
The pilot also explored the benefits of asset tokenization and fractionalization. While the tokenization of debt securities offers greater transparency and liquidity, some assets will take longer to evolve because they operate within established frameworks.
Crypto Rules Remain Unclear in Australia
While promising, the experiment exposed uncertainty around the legal and regulatory treatment of digital assets. Many tokenized assets remained undefined by the Corporations Act 2001.
Australia’s Treasury recently consulted on classifying digital assets under existing legal frameworks. The government is also developing a regulatory framework for crypto exchanges and updating its payments licensing framework.
The Australian Securities and Investments Commission canceled Binance’s derivatives license earlier this year. Shortly after, it investigated how Binance delineates between retail and wholesale investors since Australia’s investment rules don’t allow retail investors to buy derivatives products.
Binance also lost a key payment processor that limited certain crypto purchases to debit and credit cards. In the UK, credit and debit card payment provider Checkout.com recently terminated its contract with Binance.
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