Key Insights
- Hedera is supporting a number of Central Bank Trials, focusing on Testing CBDC Settlement, Payment Rails, and Regulated Digital Infrastructure.
- In regard to the Performance, Australia, the UK, and Sweden have conducted an assessment of the Hedera Network for Financial Market experimentation.
- With Payment Integrations in the USA, Singapore, and Ghana, Hedera’s role is beyond Pilot Testing, but rather Real Transaction Infrastructure Testing.
Why Central Banks Worldwide Are Testing Hedera’s Network
The presence of Hedera has surged within the Central Bank Digital Currency (CBDC) pilot programs and Infrastructure testing initiatives in various regions. Some of the latest reports indicate that their network is being evaluated by various Monetary Authorities in relation to Settlement, interoperability, and use cases associated with regulated Payments.
Hedera’s Role in Australian and UK Financial Testing
According to Web3Alert’s recently publicly shared discussion highlights, Hedera’s contribution to Project Acacia, Australia’s CBDC initiative, on how digital currency works in the National Payments System (NPP) alongside existing payment systems.
Hedera is involved in Project Acacia through its Hash Sphere product. Hedera worked with one of the central players of the NPP, Australian Payments Plus. As a result, AP+ processes approximately 70% of Australia’s retail transactions and thus is at the heart of the Australian economy.
As noted in the tweet, AP+ is also a member of the Hedera Governing Council, and this affiliation aligns Hedera’s Business-to-Business Governance with its Business-to-Consumer Payment Provisions during the Interchange Testing of Project Acacia’s CBDC.
Hedera has been selected to participate in the DLT Innovation Challenge initiated by the Bank of England. The challenge involves exploring the ability of CBDC to settle transactions on Non-Central Bank owned DLT Infrastructure while maintaining their characteristics of centralised trust and governance.
A key focus of the challenge is on Trust, Resiliency, and Governance. According to the tweet, Hedera was the only Publicly Distributed Ledger included. Additionally, references to previous use cases in relation to banks in the UK, such as Lloyds Bank and Aberdeen, were also made.
European CBDC Experiments and Public Ledger Selection
Sverige’s Riksbank has run experiments of Central Bank Digital Currency (CBDC) in limited participation of the public on the public ledger, and only Hedera and Algorand were selected in this test phase as public networks.
Due to control concerns, most Central Banks do not include public networks in their programs; this selection may imply that there is a readiness to use regulated public infrastructure in a measured and carefully defined test environment.
The tweet pointed out the long history of Sweden’s place in central banking. Being the oldest of all central banks, when they test new digital currency systems, it attracts a large degree of attention from financial institutions worldwide.
The experiments focus on three main categories: the technical performance of the CBDC; the reliability of the CBDC to settle transactions; and compliance across jurisdictions. Hedera meets the criteria that Regulators typically look for in financial markets.
Payment Infrastructure Progress in the United States
Currently, in the US, Dropp, as a micropayment service that operates on Hedera, has launched a service with FedNow using ISO 20022 messaging for richer payment data to allow smaller value transaction testing based on real-time settlement.
Dropp’s selection of FedNow also indicates the early stages of potential payment service evolution since Hedera provides Dropp with low-latency and scalable solutions to meet their transactional needs.
The fact that the Federal Reserve is now a participant with Dropp to test potential data-driven payment services, and to provide a more complete analysis of current transactions, indicates a commitment to continue to build blockchain infrastructure for ISO 20022-compatible payment services.
Asia and Africa Show Broader Institutional Use
In Singapore, Novatti launched AUDC, its Australian dollar-pegged stablecoin, on the Hedera network. The Monetary Authority of Singapore has conducted trials using AUDC as part of its cross-border payment trials.
Novatti has implemented AUDC on a variety of corporate-level ledgers, and by including Hedera, Novatti has added another ledger for regulatory testing and settlements within the Asia-Pacific.
The Digital Economy Agreement between Singapore and Australia facilitates collaboration in digital finance across borders, so the introduction of the Hedera ledger for testing AUDC corresponds with this bilateral effort.
In Africa, EMTECH has collaborated with the Bank of Ghana to evaluate the systems necessary for a Central Bank Digital Currency (CBDC) and is using Hedera Consensus and Token Services to satisfy its settlement and compliance responsibilities.
As noted in the tweet, Ghana is focused on developing an identity, building interoperability, and making sure the regulatory framework is in place.
Testing these solutions moves the existing CBDC from just representing a currency to developing the whole financial system.
Final Thoughts
Across multiple regions, Hedera continues appearing in central bank pilots focused on payments, settlement, and regulated infrastructure. The network’s repeated selection reflects ongoing evaluation rather than adoption commitments.
Still, consistent testing across diverse monetary systems shows how public distributed ledgers are being examined within formal financial frameworks.
