The Reserve Bank of Australia (RBA), which has entered the list of countries that intend to launch its own central bank digital currency (CBDC), has published a white paper outlining an elaborate plan to carry out a digital Australian dollar pilot project.
On August 9, 2022, the RBA announced a collaboration with the Digital Finance Cooperative Research Center (DFCRC) to explore CBDC use cases for Australia. The joint research resulted in the launch of a project to test a general-purpose pilot CBDC. As stated in the white paper “Australian CBDC Pilot for Digital Finance Innovation”:
“The key objectives of the project are to identify and understand innovative business models, use cases, benefits, risks and operating models for a CBDC in Australia.”
Australia’s CBDC pilot project report is expected to be published in mid-2023, based on indicative project timelines shown below.
As the central bank, the RBA will be responsible for issuing the digital Australian dollar, while the DFCRC will oversee the development and installation of the coin platform. Industry participants can join the pilot as use case providers once their implementation is approved.
The white paper suggests the use of a private, permissioned instance based on Ether (ETH). “Participants in the pilot will bear their own expenses for the conception, design, development, implementation and testing of the use cases, if they are selected”, clarifies RBA.
On September 6, 2022, the Australian Treasury ministerial department addressed the general public for their opinion on the taxation of cryptocurrencies. Deputy Treasurer Stephen Jones revealed the intention to exclude crypto assets from taxation as foreign currency.
Australian investors had a period of 25 days to give their opinion on this decision, which expires on September 30, in the next four days. The legislation, if passed into law, will amend the current definition of digital currency in the Goods and Services Tax (GST) Act to exclude it as a foreign asset,
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