NAB, The Reserve Bank of Australia (RBA), Commonwealth Bank,  Perpetual and ConsenSys, with input from King & Wood Mallesons, today jointly released a report to mark the successful conclusion of Project Atom.

Project Atom was a collaborative research project undertaken during the past year that examined the potential use and implications of a wholesale form of central bank digital currency (CBDC) using distributed ledger technology (DLT). The project involved the development of a proof-of-concept (POC) for the issuance of a tokenised form of CBDC that could be used by wholesale market participants for the funding, settlement and repayment of a tokenised syndicated loan on an Ethereum-based DLT platform. The project explored a number of issues, including:

• how access to a CBDC could be extended to a wide range of wholesale market participants, including those that would not ordinarily have access to accounts at the Reserve Bank
• the potential benefits of integrating a wholesale CBDC with tokenised assets on interoperable DLT platforms
• whether an enterprise-grade DLT platform could be a viable technology for a wholesale CBDC.

The POC demonstrated that the digitisation of syndicated loans on a DLT platform could provide efficiency gains and reduce operational risk by replacing highly manual and paper-based processes. Integrating a wholesale CBDC on the same DLT platform enabled ‘atomic’ delivery-versus-payment settlement of the drawdown, novation and repayment of the tokenised syndicated loan, and could potentially allow for other forms of programmability that could improve efficiency and reduce risk in transactions. The POC also demonstrated that an enterprise-grade DLT platform with appropriate controls on access and security could address many of the potential requirements for a wholesale CBDC system and tokenised assets platform.

NAB Group Executive, Corporate & Institutional Banking, David Gall said finding new ways of fast and easy access to funds is critical for our customers.

“The project involved the development of a proof-of-concept into the practical application of blockchain technology and asset tokenisation that is helping us shape the future of finance,” Mr Gall said.

“The results showed these technologies made loan syndication for our larger business customers easier and faster and removed friction points.  We also saw efficiency gains and reduced operational risk by replacing highly manual and paper-based processes.

“This is really important to help our larger business customers grow, particularly when they operate across multiple jurisdictions and markets.

“We look forward to continuing to work closely with the RBA and industry peers to help give Australian businesses the boost they need in order to bounce back from the pandemic.”

Assistant Governor (Financial System) Michele Bullock said: “Project Atom demonstrated the potential for a wholesale CBDC and asset tokenisation to improve efficiency, risk management and innovation in wholesale financial market transactions. The project also demonstrated the benefits of collaboration in advancing our knowledge in this area.  The Bank will continue its research on CBDCs as part of its strategic focus area on supporting the evolution of payments.”

The full report and media release are available here.