First Australian FX Transfer Via CBDC Takes Place Amidst eAUD Pilot Continuation

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Australia has managed to make the country’s first-ever FX transfer (foreign exchange) via the eAUD. This is a component of the pilot for the potential CBDC (central bank digital currency) of the country. The event takes place while several other countries from across the world are displaying a growing interest in launching or learning about digital currencies issued by a central bank.

The eAUD Is Looking Good

On May 17th, Canvas, a provider for Blockchain infrastructure, said that managers of crypto funds, TAF Capital and DigitalX used USD Coin, the stablecoin, to trade against the eAUD. According to Canvas’ report, the settlement of the transaction happened instantly. As such, it termed it as much more successful than the error-prone, expensive, and slow traditional remittance and FX networks.

The trade for FX is only one part of multiple tests that are currently ongoing as Australia tried to understand where a CBDC like the eAUD can be best used. The RBA (Reserve Bank of Australia) launched this pilot program working alongside the DFCRC (Digital Finance Cooperative Research Center), an institute that researches finance.

The test by Canvas explored how and if eAUD can be sued for settling tokenized FX. This can be an indicator of the advantages that a CBDC offers against fiat currencies as well as settlement platforms that currently exist. Canvas’ “Connect”, an application that is decentralized, was the location for the transaction. It is a layer 2 from Ethereum and uses the roll-up technology that is ZK (zero-knowledge) devised by StarkWare.

David Lavecky, the CEO of Canvas, termed the trade as “historic”. He further said that this digital dollar can possibly address issues in remittance and FX markets, like making it more accessible, reducing fees as well as improving the time taken for transactions.