(Bloomberg) -- Australia's top economic agencies are collaborating on a project to review the case for a central bank digital currency in the country.
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The Reserve Bank of Australia, Treasury and others will oversee the research effort designed to explore the potential economic benefits of introducing such a currency in Australia, the RBA said in a statement Tuesday. The project is expected to run for about a year.
Central banks worldwide are acting swiftly to ensure they don't fall behind as money edges toward its biggest reinvention in centuries with alternative concepts like cryptocurrencies taking hold. That new technology, as well as events like the coronavirus pandemic, are among forces pushing consumers to go cashless.
A paper will be published in the next few months that will explain the objectives and approach of the project in more detail, the RBA said.
Deputy Governor Michele Bullock said the work "is an important next step in our research on CBDC. We are looking forward to engaging with a wide range of industry participants to better understand the potential benefits a CBDC could bring to Australia."
The central bank reiterated the research comes in the context of Australia already having "relatively modern and well-functioning payment and settlement systems."
The RBA is collaborating with the Digital Finance Cooperative Research Centre in the project, while Treasury is participating as a member of the steering committee. The work will involve development of a "limited-scale pilot that will operate in a ringfenced environment for a period of time."
Interested industry participants will be invited to develop specific use cases that demonstrate how the digital currency could be used to provide innovative and value-added payment and settlement services to households and businesses, the RBA added.
A report on the findings, including an assessment of the various use cases developed, will be published at the conclusion.
The Digital Finance Cooperative Research Centre is a 10-year, A$180 million ($126 million) research program funded by industry, universities and the Australian government.
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