Overview of the Article
- Novatti has been approved to join the pilot test program by the Reserve Bank of Australia (RBA) to test Central Bank Digital Currency (CBDC).
- Stellar Lumens will be used in this pilot and Novatti will issue a stablecoin, eAUDD, backed 1:1 with digital Australian Dollar.
- The focus of this test is to see whether a stablecoin pegged to a fully-backed CBDC can generate customer confidence as it relates to stablecoin.
Reserve Bank of Australia Testing CBDC on Stellar Blockchain
The Reserve Bank of Australia (RBA) has announced that it is testing its Central Bank Digital Currency (CBDC), using the help of private industry players. One such partner is Novatti, which has been approved to take part in this pilot test. The blockchain protocol being used for this project is Stellar Lumens.
Novatti Issuing Stablecoin eAUDD Backed 1:1 With Digital Australian Dollar
As part of its role in the project, Novatti will be issuing a stablecoin called eAUDD. This stablecoin will have its full reserve backed by the RBA and will be pegged 1:1 with the digital Australian Dollar. It can be used by users to verify the CBDC’s reserve and also for making purchases or donations through non-fungible tokens (NFTs).
Testing Whether Stablecoins Can Generate Customer Confidence
The purpose behind this pilot is to assess whether a fully-backed CBDC can inspire confidence among customers when it comes to using stablecoins for payments. Across the world, central banks are looking into different possibilities as far as CBDCs go due to their cheaper and faster alternatives compared with fiat notes. To ensure user privacy while using these currencies, many apex banks are leveraging other technologies apart from blockchain technology.