Australia Completes Its First Foreign Exchange Transaction Using CBDC
Australia makes history as it completes its first foreign exchange transaction with eAUD.
In a groundbreaking moment for Australia, the country’s first-ever foreign exchange (FX) operation using eAUD, a contender for the national digital currency, has been carried out.
The occasion signifies a significant stride in the ongoing trial for the potential central bank digital currency (CBDC) as an international curiosity in such state-sanctioned digital currencies heats up.
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This striking achievement was announced on May 17th by blockchain infrastructure firm, Canvas, which facilitated the transaction between crypto fund managers DigitalX and TAF Capital.
The trade, involving the exchange of eAUD and the stablecoin USD Coin (USDC), took place in an instant, showcasing a huge step forward compared to the traditional FX systems, known for being slow, expensive, and error-prone.
The transaction happened on a decentralized app hosted on Canvas’s “Connect,” an Ethereum Layer-2 platform that utilizes StarkWare’s zero-knowledge (ZK) roll-up technology.
This game-changing trade was one in a series of tests undertaken as part of the nation’s exploration into potential applications for a CBDC.
The pilot program, a joint venture between the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC), aimed to understand the potential benefits of using the digital version of the Aussie dollar for tokenized FX settlements.
David Lavecky, CEO of Canvas, referred to this trade as “historic” and emphasized that this digital dollar could help overcome significant hurdles in FX and remittance markets, including “improving transaction times, reducing fees and providing more open access.”
In a similar pilot test in April, the Australia and New Zealand (ANZ) bank employed the CBDC to trade carbon credits. ANZ used eAUD to back its A$DC stablecoin, trading credits on a public blockchain, and the settlement happened “in near-real-time.”
The CBDC trial, which kicked off on March 31st, is slated to wrap up on May 31st. A thorough report reviewing the various CBDC applications tested will be published on June 30th.