The Reserve Bank of Australia (RBA) has launched “Project Acacia”, advancing the development of a wholesale central bank digital currency (CBDC). This project will trial 19 pilot initiatives using actual money and assets, plus five proof-of-concept trials with simulated transactions.

These trials will examine various asset classes, including fixed income, private markets, trade receivables, and carbon credits. Settlement methods will incorporate CBDCs, stablecoins, bank deposit tokens, and innovative uses of commercial bank deposits at the RBA. The testing will occur over the next six months with platforms like Hedera, Redbelly, R3 Corda, and Canvas Connect, expecting a final report in the first half of 2026.

Project Acacia Use Cases

The selected use cases will help evaluate how central bank and private digital money, along with payments infrastructure, could benefit Australia’s wholesale financial markets. The RBA focuses on wholesale applications, seeing limited benefit for a retail digital currency. Anticipated advantages include reduced risks, increased transparency, better collateral efficiency, and cost savings.

The Reserve Bank’s latest move signals a methodical push into reshaping how high-value financial transactions are settled and tracked in the institutional space. By committing to live-money trials, they’ve gone far beyond academic exercises—this is real experimentation that could ultimately upend long-established systems used by traders and clearers. It’s not just theoretical tinkering either. With tests touching everything from fixed-income flows to more exotic holdings like carbon credits, the scope is wide enough to surface practical friction points early.

What’s particularly interesting here is the blending of settlement methods. This includes introducing digital assets that mimic traditional bank deposits, which are typically siloed within legacy systems. When combined with blockchain-integrated layers like Hedera and R3 Corda, the notion of finality in transaction settlement may shift from hours or days to minutes. That change isn’t just about speed—it directly affects financing costs and exposure limits on large positions. With the real money involved in many of these pilots, we’ll likely get strong signals about where the pain points still lie.

The implications for pricing are clear. As the infrastructure underpinning transaction flows becomes leaner, spreads on various wholesale products could compress. Margining requirements might adjust. Old assumptions about delivery risk and payment lag will need to be reassessed. When intermediaries like custodians or clearinghouses begin operating in the same circuit as a central bank-issued token, the buffer periods that have long bookmarked certain trades could shrink. That has a direct impact on capital that is tied up unnecessarily under current stress-testing models.

Institutional Market Bias

We should also not ignore how the project’s bias toward institutional markets reflects deeper scepticism toward consumer-held digital currency. By ruling out retail applications outright, the central bank is clearly steering toward backing systems that keep most participants within a tightly supervised ring. That decision gives more weight to utility and system integrity over adoption by sheer volume, which arguably makes the findings more applicable to those trading risk and delivering capital against liabilities.

From a trading perspective, this means closely watching how tokenised versions of existing forms of value—like bank deposits or collateral objects—interact on these experimental rails. For anyone managing exposures or calibrating funding strategies over horizons of 3 to 12 months, there may be changes in terms of what’s considered credible settlement collateral. In this climate, we may need to re-rank liquidity assumptions across different instruments. Notably, the way atomic settlement is handled in a wholesale digital money environment can mechanically change the cash-needs profile across derivatives with stricter timing windows.

We expect market chatter to intensify around two inflection points. First, once certain trials show economic edge over traditional methods, and second, if clearing times for synthetic trades (swap legs, repo terms, etc.) under a digital settlement model fall short of expectations. In both cases, it becomes possible to project potential volatility shifts on roll cycles or expiry dates. Execution desks would be wise to monitor how the pilots handle corner-case scenarios—such as censorship risks or major operational downtime—not because they are likely, but because system redesigns can spawn new failure modes.

Lastly, the ability of commercial institutions to create private tokens that behave like sovereign-backed money introduces a wildcard. If these deposits at the national bank start circulating with functionality similar to stablecoins yet carry different risk weights, regulatory interpretations could reshape demand for those instruments practically overnight. That shift might alter correlation surfaces within spreads or curve positioning as market makers adjust hedging ratios to align with new execution norms. Risk teams should begin modelling these instruments under baseline stress assumptions now to avoid being caught off guard if regulatory clarity arrives later than market adoption.

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