Australia has started a sweeping trial to test digital currencies as part of the second phase of Project Acacia led by the Reserve Bank of Australia.
Overview of the Project
The Reserve Bank of Australia (RBA) announced the launch of the second phase of the Acacia pilot project, lasting six months. The project aims to explore how digital currencies can change the country's financial industry. The trial will cover 24 scenarios involving digital currencies, including stablecoins and bank-issued deposit tokens.
Involvement of Major Banks
The digital currency trial involves three of the 'big four' banks in Australia: Commonwealth Bank (CBA), ANZ, and Westpac. CBA, in partnership with JPMorgan, is testing the repo market, which includes short-term loans backed by government securities. ANZ is trialing tokenized trade payables and exploring the use of wholesale Central Bank Digital Currency (CBDC) to enable faster settlements in the fixed-income market. Details of Westpac's involvement are yet to be announced.
Regulation and Innovation
The trial has been made possible due to temporary relief from certain legal and regulatory obligations by Australian authorities. The Australian Securities and Investments Commission (ASIC) is working with the RBA to approve participants, allowing them to test transactions for digital assets not currently regulated. The regulator highlights the potential of Distributed Ledger Technology (DLT) to streamline financial market infrastructure.
Project Acacia reflects Australia's ambition to explore the possibilities of digital currencies and enhance its financial system. Results from the trial are expected to be known by early 2026.
