- Australia’s CBDC pilot program partners with Mastercard on Ethereum and Novatti on Stellar for digital currency development.
- The initiative aims to establish an Australian dollar stablecoin backed 1:1 by Pilot CBDC, which could increase customer trust in stablecoins and promote financial stability.
Australia’s Central Bank Digital Currency (CBDC) project is opening a new chapter in its pilot program by working with Ethereum and Stellar. Mastercard and Novatti, the principal actors in these collaborations, aim to enhance the country’s digital currency landscape.
Mastercard, a leading global payments corporation, has initiated a project involving Ethereum for the CBDC pilot. This implies the creation of an Australian dollar (AUD) ERC20 token, a type of token compliant with the Ethereum blockchain’s standards.
On the other hand, Novatti, a renowned fintech firm, has proposed to work with Stellar for the project. The intent is to become an anchor for AUD on Stellar, using the CBDC as proof of reserve. This essentially means that Novatti will create a digital version of the Australian dollar (AUD), backed by the central bank digital currency.
This innovative CBDC platform is operating with a private version of JP Morgan’s Quorum, a variant of Ethereum. Several groups are engaged in the issuance of an AUD on Stellar, backed by the permissioned ledger CBDCs from this platform, with Novatti leading the efforts.
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In this undertaking, Novatti is set to issue a supplementary stablecoin, known as eAUDD. The eAUDD is an AUD stablecoin backed 1:1 by the Pilot CBDC issued by the Reserve Bank of Australia (RBA). The company will allow customers to independently verify the reserve, bringing an element of transparency to the process. This Stellar blockchain-based stablecoin will be obtained by a select group of participants who will use it to purchase a non-fungible token (NFT) for making a charitable donation.
The eAUDD pilot’s outcomes will determine if a stablecoin with 1:1 CBDC backing can instill higher customer confidence in stablecoins. A broader acceptance of stablecoins may also usher in banking regulation safeguards, secure payments, and increased financial stability for users.
Novatti’s CEO, Peter Cook, expressed his excitement at being selected for this pioneering opportunity, noting that it aligns with Novatti’s focus on compliance, security, and utility. The CBDC pilot is slated to conclude in May, with results expected to be published mid-year.
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