Australia’s ‘Big 4’ bank creates stablecoin for carbon trading and remittances

[ad_1]

National Australia Bank (NAB) is set to become the second Australian Big 4 bank to launch an Australian dollar-pegged stablecoin on the Ethereum network.

Scheduled to launch around mid-2023, the AUDN stablecoin aims to streamline cross-border remittances and carbon credit trading, according to a Jan. 18 report from the Australian Financial Review (AFR).

NAB Chief Innovation Officer Howard Silby said the decision to mint the AUDN stablecoin on Ethereum, which is backed 1:1 by the Australian dollar (AUD), was based on their belief that the infrastructure of the blockchain will play a key role in the next evolution of finance:

We certainly believe there are elements of blockchain technology that will be part of the future of finance. […] From our point of view, we see [blockchain] has the potential to deliver instant, transparent and inclusive financial results.

Implementing AUDN for real-time cross-border remittances could become a way for customers to avoid the slower and more expensive SWIFT payment network.

Trading carbon credits and other forms of tokenized real-world assets will also be a major use case for AUDN, Silby said. He also added that they plan to offer stablecoins in multiple currencies where the bank has licenses.

NAB’s announcement of AUDN comes nine months after rival bank Australia and New Zealand Banking Group (ANZ) launched 30 million tokens of its own A$DC titled stablecoin in March 2022, which is also used for international remittances and carbon trading.

Prior to the ANZ and NAB stablecoin projects, the two banks initially planned to partner with two other major Australian banks Commonwealth Bank of Australia (CBA) and Westpac to co-launch an AUD-backed domestic stablecoin.

However, it fell through due to competition concerns and the fact that banks were at different stages of adoption and strategy, AFR explained.

NAB, one of Australia’s Big 4 banks, is expected to roll out its own stablecoin in mid-2023. Source: PYMNTS.

Jonathon Miller, Australian managing director of crypto exchange Kraken Australia, told Cointelegraph that banks are beginning to recognize the technical advantages blockchain infrastructure offers over traditional legacy systems:

The continued adoption of crypto technology by financial institutions like ANZ and now NAB for its potential to create significant efficiencies in the financial system […] is an explicit recognition of [blockchains] competitive advantage over traditional payment systems.

We expect this trend to continue, inevitably evolving to include the adoption of various other cryptocurrencies and tokens to increase use cases in the Australian economy, he added.

Related: Stablecoin framework is a near-term priority for Australian regulators

It also remains to be seen how these privately-issued stablecoins would work in tandem with the Reserve Bank of Australia’s eAUD, a central bank digital currency (CBDC) that is currently in its pilot phase.

However, NAB is confident that both will be able to operate simultaneously and will have their own set of unique use cases.

[ad_2]