- The new stablecoin will be fully backed by the Australian dollar(AUD)
- AUDN will first be only rolled out for institutional clients
The stablecoin craze is taking over the world by storm. One of the largest banks in Australia is the latest to hop on to this bandwagon.
As per the latest Australian Financial Review (AFR) report, the National Australia Bank (NAB), has created a stablecoin called AUDN, which it plans to launch in mid-2023. AUDN will be launching on the Ethereum and Algorand blockchains.
The new stablecoin will be fully backed to the Australian dollar and the money will be held by the National Australia Bank. As per AFR, the stablecoin will first be only rolled out for institutional clients seeking a cost-effective on-ramp for crypto investments.
According to NAB’s Chief Innovation officer Howard Silby, the main aim of AUDN would be to allow its customers to settle transactions on blockchain tech in real-time using Australian dollars. He further added that the new stablecoin could also be used for several purposes, including “carbon credit trading, overseas money transfers, as well as repurchase agreements”.
The new technology could allow NAB to avoid the SWIFT network and reduce reliance on costly complex corresponding bank relationships when money is sent abroad. “We certainly believe there are elements of blockchain technology that will form part of the future of finance. From our point of view, we see blockchain has the potential to deliver instantaneous, transparent, inclusive financial outcomes,” NAB said.
Last year hinting about the potential launch of stablecoin, Silby had stated, “We’ve done trades, but we’ve had to settle partly in fiat. So, the big breakthrough will be later this year when we have a stablecoin, and we can actually do the whole thing on-chain.”
He added that the bank is also planning to offer stablecoins in “multiple currencies” where NAB has licenses. DigitalX, an ASX-listed digital asset specialist, has agreed to use the AUDN once it is launched to NAB customers.
Earlier this year, ANZ became the first Australian bank to mint an Australian dollar (AUD) pegged stablecoin called A$DC. Australia’s central bank has also started a pilot test to explore potential use cases for the country’s own CBDC-central bank digital currency, expected to be launched around mid-2023.