Central bank digital currencies (CBDCs) may not solve any problems faced today, but could be the answer to ones not even fathomed yet, says the executive spearheading Australia’s CBDC pilot.
Dilip Rao, a former Ripple executive who’s now spearheading Australia’s CBDC research project, told Cointelegraph th a central bank-issued currency could be built for use cases not yet considered:
Big shout out to attendees at the #AustralianCBDCPilot Conference last Friday – 100 in person and over 150 online!
15 use cases demonstrated, three panels offered deeper insights into the #futureofmoney!
Thanks @RBAInfo, @DigiFinanceCRC, Treasury and all industry partners! pic.twitter.com/0wvNrMechi
— diliprao (@diliprao) May 29, 2023
Rao serves as the research program director at the Digital Finance Cooperative Research Centre, which is collaborating with the Reserve Bank to explore use cases of a potential CBDC.
Rao, however, said the question is yet to be answered why individuals would want or need to use one.
One possible future use, Rao explained, could be large institutions trading tokenized assets on marketplaces that may prefer using a CBDC to mitigate risks.
Australia’s CBDC pilot is examining 14 possible use cases. Rao said the report on those tests — yet to be released — will narrow down which would deserve further exploration.
“You don’t necessarily need a CBDC in every use case,” he said. He added that “people have to see value” in a CBDC if it’s to be widely adopted.
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Another hurdle for a CBDC, at least in Australia, would be the required legislative changes that need public backing.
For such changes to make it through Parliament, “politicians have to come on board,” said Rao, which would require a wide amount of public consultation.
Such consultation would focus on solving the “problems that people want solved,” according to Rao. “No politician is gonna do something that will lose votes,” he added.
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Additional reporting by Ciaran Lyons.