Two major banks have used a real central bank digital currency to trade deposit securities.
It is the first time this has happened using a CBDC that is a claim on the central bank.
A Senate committee heard lack of regulation in the digital asset area is holding back innovation.
Westpac and Commonwealth Bank have used a digital version of the Australian dollar backed by the Reserve Bank to trade and pay for real certificates of deposit, which are debt instruments issued by each bank.
The deal is a world-first between mainstream regulated banks using a “central bank digital currency”, or CBDC, and market securities. It also points to the initial benefits of CBDCs in interbank markets, where banks do business with each other.
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James Eyers writes on banking, payments and fintech. He is a former legal and investment banking editor at the AFR, has degrees in commerce and law from UNSW, and is co-author of Buy now, pay later: The extraordinary story of Afterpay Connect with James on Twitter. Email James at jeyers@afr.com.au
