Australia will begin testing its central bank digital currency as part of a six-month trial under Project Acacia, exploring its role in wholesale financial markets. Per a July 10 statement from the Reserve Bank of Australia (RBA), the trial would involve a range of participants from across the financial ecosystem, including three of the country’s four largest banks, Commonwealth Bank, ANZ, and Westpac, as well as international players such as JPMorgan and domestic fintechs. In total, 24 use cases from banks, payment providers, digital asset platforms, and market infrastructure firms have been conditionally selected to take part. Nineteen of these trials will involve real money transactions using stablecoins, tokenized bank deposits, and a pilot wholesale CBDC, while the remaining five will serve as proofs-of-concept using simulated transactions. The tests are designed to examine digital settlement across a range of asset classes, including fixed income, private markets, trade receivables, and carbon credits. During the trial, the wholesale CBDC would be issued on multiple blockchain platforms, including Hedera, Redbelly Network, R3 Corda, Canvas Connect, and other Ethereum-compatible chains. Meanwhile, some tests will focus on new methods of using exchange settlement accounts at the RBA to support tokenized asset activity. Ultimately, participants will be assessing whether digital forms of money can deliver greater efficiency, improved liquidity management, and reduced counterparty risk in Australia’s wholesale financial system. For instance, one key area of focus will be the repo market, where Commonwealth Bank and JPMorgan are evaluating how digital currency and tokenized collateral could streamline transactions. According to the announcement, the project is expected to conclude by early 2026, with findings set to be published within the first quarter. Results from the trial would define how RBA’s ongoing research into how digital currency and tokenisation could support the evolution of Australia’s financial infrastructure. Project Acacia Project Acacia is a joint initiative between the RBA and the Digital Finance Cooperative Research Centre, with backing from key regulatory agencies including the Australian Securities and Investments Commission (ASIC), the Australian Prudential Regulation Authority (APRA), and the Treasury. It was first announced in November 2024 with the goal of exploring the foundations for a tokenized asset ecosystem in Australia. “Project Acacia represents an opportunity for further collaborative exploration on tokenised asset markets and the future of money by the public and private sectors in Australia,” said Brad Jones, Assistant Governor (Financial System) at the RBA. “The use cases selected in this project will help us to better understand how innovations in central bank and private digital money, alongside payments infrastructure, might help to uplift the functioning of wholesale financial markets in Australia,” he added. Australia has yet to regulate crypto markets Over the past year, regulators in Australia have primarily focused on tidying up the crypto space by going after regulatory blind spots, tightening compliance gaps, and reinforcing oversight across the sector. In April, ASIC shut down 95 companies linked to fraudulent crypto investment and romance scams. Authorities cited over 1,400 victims across multiple countries, with reported losses exceeding $35 million. Around the same time, the Australian Transaction Reports and Analysis Centre warned that inactive crypto exchanges could be deregistered to prevent exploitation by criminals. AUSTRAC has also imposed new rules on crypto ATM operators, capping cash deposits and withdrawals at AU$5,000 per transaction and requiring mandatory scam warnings. Yet, a formal regulatory framework that fully encapsulates the crypto sector has not been finalised. However, earlier this year, regulators confirmed that a draft law is in the works and expected to be released later in 2025, outlining new licensing requirements for exchanges, custodians, and stablecoin issuers under existing financial services legislation. The post Australia to begin wholesale CBDC testing with major banks, fintechs in 6-month trial appeared first on Invezz
