ANZ will experiment offline CBDC payments using smart cards

    Simar Marwaha
    Simar Marwaha
    Published on March 08, 2023 02:43 PM

    In order to test offline CBDC payments using smart cards that can be loaded with money and used like actual currency, ANZ is collaborating with two institutions. Let's explore it further.

    ANZ will experiment offline CBDC payments using smart cards
    Source: Medium

    The Reserve Bank of Australia is conducting the study as one of fourteen pilot tests to look at possible applications for a central bank digital currency (CBDC).

    Goal of the ANZ trial is to demonstrate how CBDC, which uses blockchain technology and NFC-enabled smart cards, might allow users to send fast payments to one another even while they are offline and not linked to the banking system as it currently exists.

    Trial will be run on the campuses of RMIT University and Southern Cross University. Participating students will get NFC-enabled smart cards that are pre-loaded with CBDC cash as part of the trial programme.

    The purpose is to show how an institution like a university may intervene and offer urgent financial help through the distribution of CBDC in dire circumstances, including when students are unable to access cash through standard banking services or internet banking.

    Phases of CBDC Pilot

    Concerning CBDC, this will be another another crucial factor in the domain of crypto regulation. There will be numerous phases throughout the pilot. To access their CBDC balance, the institutions will first use a safe smartphone app. The smart cards will be loaded with specified amounts of CBDC using NFC technology.

    Second, the participating students will receive the smart cards, which they may use to make purchases at businesses located on campus such cafés, gyms, and book stores.

    Third, businesses will be equipped with a safe smartphone app to take student card payments at the point of sale, where CBDC payments will be transferred in an offline scenario. These payments from customers to businesses are cash sales.

    Lastly, retailers may check the CBDC they have received on their app and choose to convert their remaining balance into fiat money, which will be sent into their bank accounts.

    Other Key Aspects of CBDC Payments

    For more delicate use cases, such as payments to communities hit by emergencies or government-sponsored payment programmes for communities in need, researchers at the institutions want to conduct scalability analyses.

    In the RBA pilot, there are four tests that have ANZ support. A third study will examine the issuing of CBDC in accordance with KYC procedures, while another will examine the efficiency and efficacy of employers adopting CBDC for superannuation contributions as a feasible alternative to conventional payment methods.

    A fourth project, carried out in partnership with CBA, will show how to tokenize natural resources, issue stablecoins from banks, and employ smart contracts to accomplish atomic settlement on a public permissionless blockchain.

    This pilot programme supports the issue of commercial bank stablecoins with a AUD value in order to show how CBDC may be used as a risk-free settlement asset.