Australian central bank proposes centralized digital currency
August 9, 2022, 9:17 am

Australian central bank proposes centralized digital currency

Digital money refers to encrypted tokens or coins - Photo. Pixabay

Australia's central bank, the Reserve Bank of Australia (RBA), has embarked on a project to explore the potential uses for a federally backed digital currency, the Xinhua reported.

The RBA announced on Tuesday that, in collaboration with the Digital Finance Cooperative Research Centre (DFCRC), it would run a year-long, limited-scale trial of a central bank digital currency (CBDC).

The RBA said: "The Bank and the DFCRC will select a range of different use cases to participate in the pilot, based on their potential to provide insights into the possible benefits of a CBDC.”

Dr. Andreas Furche, CEO of the DFCRC, said the technology for a digital currency already existed and rather the project was about understanding how a CBDC could help Australia.

He said: "The key research questions now are what economic benefits a CBDC could enable, and how it could be designed to maximize those benefits.”

Australia's central bank has embarked on a project to explore the potential uses for a federally backed digital currency - Photo. Pixabay

Unlike traditional digital currencies such as Bitcoin and Ethereum, a CBDC would be stabilized and regulated by the government.

Mark Humphery-Jenner, associate professor of Finance at the University of New South Wales (UNSW), told Xinhua on Tuesday that a CBDC often proposes a variety of benefits from faster transactions, ease of government stimulus or monetary control, and smoother international transactions.

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"CBDCs are in stark contrast to traditional cryptocurrency...a CBDC presumably has the government at the centre with the government having control over who can interact with the system, currency convertibility, and full visibility of who transacts with whom."

He said for instance it would allow the government to track how welfare money is spent, and could theoretically be used to track financial fraud.

Humphery-Jenner also said it could be an additional tool for banks to control spending, and in effect inflation in the economy.

"If the government decides to increase transaction times, it would deter some expenditures and could control inflation."

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He said that the benefits of a digital currency for the individual remain "ephemeral".

"The RBA and the government will need to take steps to ensure this is not change for the sake of change, and to assuage fears that this is just about government control."

Source: xinhua

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BENEFIT, the Kingdom’s innovator and leading company in Fintech and electronic financial transactions service, has sponsored the BuildHer CityHack 2025 Hackathon, a two-day event spearheaded by the College of Engineering and Technology at the Royal University for Women (RUW).
Aimed at secondary school students, the event brought together a distinguished group of academic professionals and technology experts to mentor and inspire young participants.
More than 100 high school students from across the Kingdom of Bahrain took part in the hackathon, which featured an intensive programme of training workshops and hands-on sessions. These activities were tailored to enhance participants’ critical thinking, collaborative problem-solving, and team-building capabilities, while also encouraging the development of practical and sustainable solutions to contemporary challenges using modern technological tools.
BENEFIT’s Chief Executive Mr. Abdulwahed AlJanahi, commented: “Our support for this educational hackathon reflects our long-term strategic vision to nurture the talents of emerging national youth and empower the next generation of accomplished female leaders in technology. By fostering creativity and innovation, we aim to contribute meaningfully to Bahrain’s comprehensive development goals and align with the aspirations outlined in the Kingdom’s Vision 2030—an ambition in which BENEFIT plays a central role.”
Professor Riyadh Yousif Hamzah, President of the Royal University for Women, commented: “This initiative reflects our commitment to advancing women in STEM fields. We're cultivating a generation of creative, solution-driven female leaders who will drive national development. Our partnership with BENEFIT exemplifies the powerful synergy between academia and private sector in supporting educational innovation.”
Hanan Abdulla Hasan, Senior Manager, PR & Communication at BENEFIT, said: “We are honoured to collaborate with RUW in supporting this remarkable technology-focused event. It highlights our commitment to social responsibility, and our ongoing efforts to enhance the digital and innovation capabilities of young Bahraini women and foster their ability to harness technological tools in the service of a smarter, more sustainable future.”
For his part, Dr. Humam ElAgha, Acting Dean of the College of Engineering and Technology at the University, said: “BuildHer CityHack 2025 embodies our hands-on approach to education. By tackling real-world problems through creative thinking and sustainable solutions, we're preparing women to thrive in the knowledge economy – a cornerstone of the University's vision.”