Southern Cross University and ANZ test digital currency

In an Australian-first, Southern Cross University, in collaboration with ANZ, has wrapped-up a pilot using central bank digital currency (CBDC) known as eAUD.

The pilot tested CBDC - a digital version of a real claim on the Reserve Bank of Australia - when students paid for goods and services offline at on-campus vendors.

The eight-week pilot explored how a CBDC could address situations where online connectivity is absent, such as during major outages and in communities that lack the means to connect online.

As a part of the test, ten Southern Cross students were given NFC-enabled smart cards, each pre-loaded with eAUD to spend at selected vendors at the University's Gold Coast and Northern Rivers campuses.

Richard Jones, University Director of Financial Services and project lead, said he was delighted Southern Cross was selected as one of two participating universities along with RMIT.

"During the catastrophic floods of February and March last year, the NSW Northern Rivers region was without power for several days. This meant bank ATMs and vendors' EFTPOS were unusable," Mr Jones said.

"The aim of the pilot is to demonstrate how an organisation like a university can step in and provide immediate financial support through the disbursement of CBDC in emergency situations, like a flood, where students are unable to access funds online or traditional banking services."

The owner of the Quick Brown Fox Cafe, Tim Gordon, was one of the vendors to test the digital currency and he was pleased with the results.

Tim and his partner Nui have owned the business for five years and throughout that time their business has suffered due to the floods.

Mr Gordon said that he could see the immediate benefits of the digital currency in the event of another disaster or a network failure.

"The main thing I noticed was the reliability, because it works offline it isn't susceptible to the network errors that other card systems have trouble with," he said.

Ayodhya Wathuge, a PhD candidate in the Faculty of Business, Law and Arts, said she was thrilled to be testing aspects of this innovative payment technology.

"It was very easy to use eAUD to buy goods and services. As seamless as paying using my bank card or mobile phone but with the certainty that if and when the internet is down then transactions are still possible," Ayodhya said.

"I feel really good to participate in this great project exploring the future of money. I think eventually a central bank digital country will be very popular in Australia and other countries like Sri Lanka."