Ethereum for Australia’s central bank – CBDCs soon on ETH?
Ethereum (ETH) mining will soon no longer be necessary: The Ethereum blockchain will switch from PoW to PoS and will no longer need miners to verify the blocks. The picture shows an Ethereum coin on a circuit board.
Ethereum was the incubator for many small projects. Decentralized Finance (DeFi) also only got the necessary hype through Bitcoin Method. But now the smart contract platform is moving into larger waters.
The Central Bank of Australia (RBA) has begun investigating the possible use of a tokenized central bank digital currency (CBDC). The Ethereum blockchain is to be used for the project.
Central bank wants to test CBDC on Ethereum
To this end, the RBA has partnered with the two largest Australian banks and the leading Ethereum software company ConsenSys, led by Joseph Lubin, one of the co-founders of ETH.
The results of the project are expected to be presented in early 2021. Michele Bullock, the deputy governor of the RBA of the CBDC explains that the purpose of the research project is to test the viability of a CBDC for wholesale financial markets involving transactions between institutions such as corporations or other banks:
While the case for using a CBDC in these markets remains an open question, we look forward to working with industry partners to investigate whether there is a future role for a CBDC in the Australian payments system.
CBDCs on the rise
In 2017, RBA Governor Philip Lowe claimed that the central bank had no plans to issue a wholesale or retail digital currency.
The central bank has not changed its downright negative attitude towards a retail-banking CBDC. In a September report, the RBA concluded that it was unnecessary to spend, but at the same time praised the efficiency of Australia’s new payment platform (NPP), which puts it in a favorable position compared to other countries.
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Other CBDC Initiatives China and Sweden are currently leading the global CBDC race of the major economies, with the former already testing their digital yuan.
Last month, the Bahamas became the first country in the world to officially introduce its digital currency, the sand dollar. A few days ago the European Central Bank (ECB) also heard from itself and published a survey on the digital euro.
Bitcoin the only alternative
There is no longer any way around purely digital national currencies . It is only a matter of time before cash is phased out. No one can currently say how long it will take.
Right now is the right time to take care of your money. The digital CBDC will have the same problems as the current monetary system. The amount of money is not limited and can be increased at the push of a button. As a result, inflation gets stronger and your own money loses value in the long term.
Bitcoin solves this problem and also offers other advantages such as decentralization and neutrality. Everyone can use the BTC network and doesn’t have to ask anyone’s permission. In addition, the number is limited and can only be obtained through costly processes.
Although Ethereum is not a store of value in the classic sense, the news from Australia couldn’t be better. Nevertheless, this is a pilot project.