The executive leading Australia’s central bank digital currency (CBDC) pilot Dilip Rao admitted they are destined to solve challenges yet to emerge. The former executive at Ripple Labs ruled out that CBDCs are addressing the challenges experienced today.
Australia’s CBDC Project Exploring Viable Use Cases
Rao confessed to examining 14 viable use cases of CBDCs as part of his role in leading Australia’s pilot into the Australian digital dollar. Rao indicated that CBDCs may fail to offer solutions to today’s challenges. Instead, CBDCs could provide answers to challenges yet to emerge.
The executive now tasked with spearheading the CBDC research project in Australia emphasized that the central bank-issued digital currency is likely built to solve use cases that individuals are yet to consider.
Suitability of CBDCs Solutions Lies in Unconsidered Challenges
Although noncommittal on the 14 use cases to conclude the suitability of CBDCs lies in solving future unconsidered problems, Rao admitted suitability to offer solutions. The executive serves as a research program director within the Digital Finance Cooperative Research Centre. He added the pilot project is advancing as scheduled by lauding the recent collaborations with the Reserve Bank to assess use cases for potential Australia’s CBDC.
Rao reiterated that despite the ongoing efforts, the critical question remains unanswered why individuals would want or need to use CBDC. He explained that a possible and viable future use case could involve large institutions that trade the tokenized assets on protocols with a preference to use CBDC to minimize the risks involved.
Rao disclosed that Australia’s CBDC project now involves piloting through examining 14 potential use cases. He admitted that the final report on tests conducted on the 14 use cases was not released. Nevertheless, he reassured that the CBDC project team would prioritize narrowing down on those deserving further exploration.
Rao cautioned that pursuit of each use case’s digital dollar (eAUD) is unnecessary. Participants need to witness the value of using CBDC in the case for it to accomplish wide adoption.
Australia CBDC Faces Critical Legal Hurdle
The program executive added that implementing CBDC in Australia faces a critical legal hurdle. Its implementation compels initiating legislative amendment, a project requiring public backing.
Rao holds that onboarding politicians are necessary for the legislative changes to succeed in the Australian Parliament. He concedes that the process would involve intensive public consultation.
The executive demonstrates that the consultation should lean towards solving the challenges the public desire to solve. He adds that politicians will likely dissociate with projects that would lose them votes for their reelection bids.
Rao emphasizes that one must overcome the existing hurdles by either leveraging technology or formulating facilitative legislation to ensure the individuals are comfortable with the CBDCs project.
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