ASIC provides relief for digital currency testing

Three of the major banks, a global custodian and some relative financial services minnows have been selected by the Reserve Bank and the Digital Finance Cooperative Research Centre (DFCRC) to participate in the piloting of digital currency innovations.

The selections are part of the Government’s ongoing Project Acacia.

Those selected will benefit from the Australian Securities and Investments Commission (ASIC) providing regulatory relief to support “responsible testing of tokenised asset transactions”.

The businesses selected to be lead use case participants are:

• Australian Bond Exchange
• Australia and New Zealand Banking Corporation
• Australian Payments Plus
• Canvas Connect
• Catena Digital
• Commonwealth Bank of Australia
• Fireblocks
• Forte Tech Solutions
• Imperium Markets
• Northern Trust
• NotCentralised
• ProspEx Group
• Westpac Banking Corporation
• Zerocap

The announcement of the initiative said 24 innovative use cases from a diverse range of organisations, ranging from local fintechs to major banks, have been conditionally selected for this next stage of the project. There will be:

• 19 pilot use cases, which will involve real money and real asset transactions, and
• 5 proof-of-concept use cases involving simulated transactions.

The use cases involve a range of asset classes, including fixed income, private markets, trade receivables and carbon credits.

Proposed settlement assets for the use cases include stablecoins, bank deposit tokens, and pilot wholesale central bank digital currency (CBDC), as well as new ways of using banks’ existing exchange settlement accounts at the RBA.

Issuance of pilot wholesale CBDC for testing use cases will occur on a range of private and public-permissioned DLT platforms, including Hedera, Redbelly Network, R3 Corda, Canvas Connect and other EVM-compatible networks.

ASIC said its regulatory relief would support the responsible testing of tokenised asset transactions, in some cases using CBDCs, between participants and a limited number of financial institutions in the coming months.