ASIC-licensed market operator Imperium Markets has successfully used eAUD, issued as CBDC by the Reserve Bank of Australia (RBA), to achieve ‘atomic’ settlement on securities transactions during the RBA CBDC Pilot.
The successful use case saw two major banks issue and invest in certificates of deposit, providing insight into what is achievable for streamlining trading, settlements and custody of securities in regulated markets.
Imperium Markets Chairman Rod Lewis said: “Our use case successfully demonstrated the integration of our trading and issuance technology with the central bank’s to achieve ‘atomic’ settlement using CBDC issued by the RBA.
“Fireblocks, an enterprise platform to manage digital asset operations and build innovative businesses on the blockchain, was also part of the use case and together we have achieved a first for regulated markets in Australia.
“The wholesale money markets and debt capital markets play a vital role in funding the Australian economy.
“Atomic settlement (instantaneous swapping of an asset for payment) will remove settlement, counterparty and operating risks from those markets and can create efficiencies around reserving capital, legacy system costs and market liquidity.
“We’d like to thank Westpac and the Commonwealth Bank for their participation and assistance in what has been a truly innovative development for the sector.”
The key learnings from Imperium Markets’ Pilot include:
- The technology already exists to achieve significant benefits for the Australian economy, but choosing the right technology for the circumstance is critical for regulated markets.
- Some current market processes and practices will not be suitable nor required in digital markets.
- Regulations will need to change to support a new digital economy, which needs to be safer, more secure, more efficient, more transparent, and more competitive with access to technology for all participants.
- Collaboration is key for the successful safe transition to digital markets. The onus is on market operators, market participants, regulators and governments to work together so that Australia has robust capital markets that are fit for the future.
Mr Lewis said Imperium Markets will now continue its own Pilot Program with its partner r3 using its Corda Distributed Ledger Technology (DLT).
“Atomic settlement is one part of the solution,” Mr Lewis said.
“Imperium’s technology infrastructure includes DLT which can provide benefits as they relate to the issuance and secondary trading of securities, digital payments, digital custody, digital registry, and cyber security.
“Now we have completed the RBA Pilot, we are looking to collaborate with the market and regulators to test all the benefits of DLT, not just for settlements and payments.”