ANZ completes CBDC pilot for tokenized carbon credits

Today ANZ bank confirmed it completed one of its projects as part of Australia’s central bank digital currency (CBDC) trials. The use case involved using the ANZ A$DC stablecoin to settle tokenized carbon credit transactions. The bank is participating in four of the 15 use cases in the Australian CBDC pilot, which is being run by the Digital Finance CRC (DFCRC).

While the stablecoin was used for transaction settlement on a public permissionless blockchain, the pilot CBDC was used as the reserve asset backing the stablecoin. Outside of the CBDC experiment, ANZ previously announced its first stablecoin issuance on Ethereum a year ago.

“When applied to carbon markets, tokenisation has the potential to improve efficiency and transparency, reduce risk and preserve the unique characteristics of underlying projects to incentivise investment in climate solutions,” said ANZ Banking Services Lead Nigel Dobson.

For the trial, ANZ partnered with Grollo Carbon Ventures (GCV) and tokenized existing Australian Carbon Credit Units (ACCUs). Grollo purchases the carbon credits with settlement taking place in near real-time. Given the near instant settlement, the counterparty risk is minimal, particularly as the risk free CBDC is used to back the stablecoin.

The other use cases involving ANZ include offline CBDC payments and using CBDC to pay pension contributions. For the pilot, ANZ is also the sole distributor sitting between the central bank and CBDC pilot use case providers. So participants pay money into an ANZ bank account and receive the Australian dollar CBDC in return. It is also conducting KYC on all users.

Many of the use cases are business applications, but the CBDC trials are a combination of both wholesale and retail CBDCs.