National Australia Bank has developed AUDN, a stablecoin that enables business customers to settle transactions in Australian dollars.
The National Australia Bank (NAB) will be the second of the “Big 4” Australian banks to launch an Australian dollar-pegged stablecoin on the Ethereum network. According to an Australian Financial Review report from January 18, the AUDN stablecoin is set to emerge in mid-2023 with the purpose of simplifying international transfers and the exchange of carbon credits (AFR).
The stablecoin will primarily be used as a settlement token between numerous parties involved in a transaction. According to NAB’s Chief Innovation Officer Howard Silby, AUDN could be used for carbon credit trading, foreign money transfers, and repurchase agreements.
NAB’s December launch of an Ethereum-based stablecoin follows Melbourne rival ANZ’s establishment of a related product, A$DC, nine months earlier. Individual banks have begun to produce stablecoins following the failure of the four leading Australian banks to launch an industry-wide Australian dollar stablecoin early last year.
The attempt, however, failed due to competitiveness concerns and the fact that banks were at varying stages of their crypto strategy. NAB’s chief innovation officer, Howard Silby, claimed that the decision to mint the AUDN stablecoin on Ethereum was based on the belief that blockchain technology will play an important role in the future generation of banking.
According to official reports, NAB and ANZ are working with banking authorities to develop stablecoin criteria. Last month, Reserve Bank Governor Philip Lowe emphasized that stablecoin regulation should be a significant priority, adding that they should be treated similarly to bank deposits.
Stablecoins reduce the volatility of certain cryptocurrencies by anchoring their value to a fiat currency. They are critical to realizing the promised benefits of blockchain technology, notably in settlement processes, because they allow for simultaneous payment and transfer of digital assets, as opposed to the current one- to a two-day delay.
