Crypto interest is being partly driven by the highly-low interest rates, as stated by Michele Bullock (the assistant governor of the Reserve Bank of Australia, while signaling that some consideration is being done by the RBI regarding the creation of a CBDC (central bank digital currency) to be utilized in the wholesale markets, in the words of the Australian Financial Review.
Talking about an event conducted by Women in Payments recently this week, Bullock mentioned that the CBDCs could minimize the charges of cross-border payments, as well as that the institutional interest regarding the technology is surging to a great extent, due to customer-led innovation in searching for the alternative products of finance to make them higher profits, as well as a decline in the utilization of banknotes. She further revealed that this began with Bitcoin, however, something like an extremely low interest-rate atmosphere is involved at its back that they experienced after the worldwide financial crisis. She said people are pursuing ways of earning.
The RBA is in advance included in the international team of central banks, and the Bank for International Settlements, contributing to a pilot project of CBDC named the Project Dunbar which targeted at minimizing the cross-border payments among several CBDCs. Collaboration has been made among South Africa, Singapore, Malaysia, and Australia to construct technical prototypes for various venues of distributed ledger technology, and examine different governance as well as operating designs to permit several CBDC infrastructures’ sharing.
Natively, the work has also been done by the RBA in association with Commonwealth Bank and National Australia Bank on a program allowing the transfer of an asset to a purchaser at the very moment the payment is carried out (an idea known as atomic settlement).
The appropriately titled Project Atom got introduced in the latter part of the previous year with utilizing the currency backed by RBA to control the costs and risks involved in the transactions on a wholesale level. Bullock disclosed that the wholesale field, at the moment, is grasping a lot of attention. The idea of being capable of doing atomic settlement along with devising the method for the things to happen is significant in the scenario of that market. She pointed out that, in her opinion, it did not have much importance for the retail sector.
