AUDN stablecoin will be fully backed by Australian dollars, which are held in trust by the bank. The stablecoin will work on the Ethereum network and Algorand blockchain.
💡 The National Australia Bank (NAB) is one of the largest banks in Australia, while also making up a considerable proportion of the New Zealand market, among others. The bank has more than 32 thousand employees who work for more than eight and a half million customers.
According to a report by the Australian Financial Review (AFR), the new stablecoin will allow instant transactions with the Australian dollar on the blockchain. At the moment, the stablecoin is positioned as a settlement token. According to the plan, AUDN will be used for:
1) Cross-border payments (NAB believes that stablecoins will become a cheaper and more effective alternative to the SWIFT system);
2) Carbon credits trading (carbon credit certificates or permits regulating the right to carbon dioxide or other greenhouse gas emissions and their amount);
3) To make bond Repo (Repurchase agreement) transactions.
NAB's Chief Innovation Officer, Howard Silby, also stressed that in the future the bank intends to provide stablecoins in "multiple currencies" in compliance with all legal requirements.
”We can see obvious benefits for the cash leg of settlement of carbon credits on a blockchain, and we also plan to use it for cross border remittance. We are planning to offer stablecoins in multiple currencies in jurisdictions where NAB has licences.” - said Silby.
AUDN is also planned to be implemented in the work of NAB in order to move from “T+2” settlement (two business days after the transaction date), to the instant "T" settlement.
The Australian Financial Review report also says that NAB discussed the launch of stablecoin with regulators. Despite the fact that there is no regulatory framework yet. Mr. Silby noted that the bank will be able to obtain a license for any new legal regime to conduct activities for the safe storage of digital assets.
“We certainly believe well regulated entities are going to have a massive role here ensuring there is trust in any financial system that uses digital assets and currencies on a blockchain. We have a strong regulatory framework for banking. How digital assets will be treated is still emerging. But what is clear is it is less about the tech and more about whether companies in the space have governance practices, separation of duties, and understand differences in custody and trading. These are things banks are well experienced at.” - said Silby.
NAB is not the only bank that has created a stablecoin pegged to the Australian dollar. The first bank to issue its Australian stablecoin was ANZ Bank in 2022. The A$DC was issued and fully backed by the Australian dollar. A$DC is actively used to buy carbon credits. Perhaps green loans is an actual direction for the Australian stablecoins.
The adoption of distributed ledger technology saw successes and failures in Australia. Last year Australian Securities Exchange (ASX) cancelled its plans for its settlement system upgrade that would utilize blockchain technology, while the Central Bank is working on the pilot of the eAUD CBDC.
We will continue our observations on the development of digital technologies in Australia and inform you about the news!
