The Big Four banks in Australia launched an Australian-dollar pegged stable coin to boost the digital economy.
National Australia Bank (NAB) is set to become the second “Big 4” Australian bank to launch an Australian dollar-pegged stablecoin on the Ethereum network.
The AUDN stablecoin is set to launch sometime in mid-2023 and is intended to streamline cross-border remittances and carbon credit trading.18 report from the Australian Financial Review (AFR).
Capture chief innovation officer Howard Silby said the decision to mint the AUDN stablecoin — which is backed 1:1 by the Australian dollar (AUD) — was based on the bank’s conviction that blockchain infrastructure will assume a critical part in the following development of finance:
“There are elements of the future of finance that we believe will be part of the new technology. Blocks have the potential to deliver instantaneous, transparent, inclusive, financial outcomes.”
The implementation of AUDN for constant, cross-border remittances could become a way for customers to sidestep the slower and more costly SWIFT payment network.
Carbon credit trading and different forms of Tokenzied genuine assets will also be a significant use case for the AUDN, Silby said. He also added that they’re planning to offer stablecoins in “multiple currencies” where the bank has licenses.
Catch’s declaration of the AUDN comes nine months after rival Australia and New Zealand Banking Group (ANZ) launched 30 million tokens of its own stablecoin tickered A$DC in Spring, which It is also used for carbon trading.
Before ANZ and Grab’s Stablecoin projects, the two banks anticipated teaming up with the other two “Big Four” Australian banks — Commonwealth Bank of Australia and Westpac — to co-launch a nationwide Stablecoin backed by the AUD.
Jonathon Mill operator, managing director of crypto exchange Kraken Australia, told that banks are starting to acknowledge the technical benefits that blockchain infrastructure offers over traditional legacy systems:
“The persistent adoption of Crypto technology by financial institutions like ANZ and now NAB for its capability to create significant efficiencies in the financial system […] is an unequivocal recognition of the competitive benefit over traditional payment systems.”
We expect this trend to continue, which will certainly evolve to include the adoption of different other cryptocurrencies and tokens for increasing use cases in the Australian economy.
It also is not yet clear how these private bank-issued stablecoins would work couple with the Reserve Bank of Australia’s eAUD — a Central bank digital currency (CBDC) that is presently in its pilot phase.
However, NAB is confident the two will actually want to operate at the same time and have their own set of special use cases.
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