The Australian government continues its series of trials on a potential digital Australian dollar (eAUD). The country recently completed its first-ever foreign transaction with the eAUD, according to reports.
The global economy continues its eagerness to evolve digitally as new crypto-related products pop up daily. The central bank digital currencies seem to be at the forefront of the crypto industry as many nations try to figure out how to utilize their potential utility cases to their benefit.
One of the latest countries, according to the report, to take advantage of the trending innovation, creating its digital fiat currency, is Australia. Reports showed that the country made immense progress as it reached a significant milestone in the production of eAUD.
Canvas, a blockchain platform managing the creation of the digital AUD, recently announced that they successfully executed a foreign exchange transaction with the Australian CBDC
Australia’s First Foreign Exchange Trade With eAUD
According to the report, Canvas stated in a recent press conference that the firm has successfully facilitated the first ever FX trade with eAUD. The eventful transaction marked one of the pilot tests the Reserve Bank of Australia and the Digital Finance Cooperative Research Centre planned for the eAUD.
The crucial foreign exchange transaction between USDC stablecoin and eAUD was executed on the Canvas’ Connect platform, an Ethereum-based network. According to Canvas, its Connect platform aims to offer privacy, scalability, and cheaper and faster transactions to its users.
In addition, the firm pledges to leverage the Zero Knowledge L2 solution to enhance the existing foreign exchange system. Thereby eliminating the setbacks like expensive costs, risky errors, and inability to operate 24/7 that plagued the system.
The CEO of Canvas Digital, David Lavecky, stated that the recent exploit of Canvas demonstrated that the Australian CBDC would offer faster transaction time, eliminate market inefficiency, cheaper transaction fees, etc. He added that with its potential, the eAUD could solve the persistent challenges the foreign exchange and cross-border remittance markets face.
According to the report, Canvas Digital is one of the 15 separate technology solution providers selected by the Federal Reserve Bank to execute the eAUD project trials. Other firms selected are MasterCard, The Australian Commonwealth Bank, Intuit, ANZ Bank, etc.
Does CBDC Worth The Global Attention From Central Banks
A Central Bank Digital Currency is a country’s fiat currency in a digital form, always issued by the central bank of the country. It is similar to crypto assets. However, it differs as its value is pegged to its fiat form.
According to the report, the innovation has gained global recognition as almost all nations of the earth are developing or considering developing their digital fiat currency. Many nation’s Central banks are trying out CBDC’s use cases via wholesale and retail digital currencies, aiming to enhance international payments and local markets.
However, despite the enticing benefits of CBDCs, many people don’t welcome the idea of creating a digital currency to rival cryptocurrencies. For instance, a recent column in the Financial Times suggested that CBDCs are enormous projects which don’t worth the risks and costs involved.
In simple terms, the statement highlighted that the logistics and operational cost of launching a CBDC seems too costly for a scheme with little return. However, only time can tell if the apex banks are making a masterstroke or a mistake by indulging in the CBDC industry.