Australia just nailed its first central bank digital currency transfer

The first foreign exchange (FX) transaction using the the Reserve Bank of Australia’s central bank digital currency (CBDC) has been a success. 

ASX-listed DigitalX (ASX:DCC) and fund manager TAF Capital were involved in the trade of eAUD to USDC stable coin on May 17, with blockchain fintech Canvas central to the test FX transactions.

The trade was part of the RBA and Digital Finance Cooperative Research Centre CBDC pilot.

Canvas Digital CEO David Lavecky said the Canvas CBDC exchange demonstrated how the RBA’s eAUD can be used to trade AUD for other international currencies quickly and more efficiently. 

“The eAUD, as a CBDC, holds the potential to address crucial challenges in both FX and International Remittance Markets such as improving transaction times, reducing fees, and providing more open access. We believe that CBDCs, Tokenised Bank Deposits, and Digital Securities will radically transform finance and markets over the next decade,” he said.

“Our use case demonstrates the benefits of using CBDCs in tokenised FX transactions and how our privacy focused Layer 2 blockchain provides improvements over traditional markets by eliminating market inefficiencies, errors, and settlement risks.”

Canvas is one of a handful of selected Use Case Providers in the RBA eAUD project alongside the ANZ and Commonwealth banks and MasterCard.

Digital X CEO Lisa Wade said she was proud to be involved in an historic moment.

“We believe CBDC’s are a natural evolution of Ccurrency and we’re delighted to be testing FX transactions on Canvas CBDC exchange and Layer 2 Blockchain,” she said.

“It will supercharge the rollout of our key strategic initiatives, our real world asset tokenisation fund and digitising investment processes.” 

TAF Capital cofounder Michael Prendiville said FX markets and international remittance networks are renowned for being slow, expensive and prone to errors.

“This transaction is an exciting step, radically transforming financial and capital markets, creating efficiencies not available until now,” she said.

“Traditional foreign exchange markets and international remittance networks are renowned for being slow, expensive and prone to errors, we now have a safe and secure solution.”