National Australia Bank to launch Stablecoin on Ethereum

What is Stablecoin?, Applications of AUDN, Future scope of AUDN

National Australia Bank to launch Stablecoin on Ethereum

As we know that Australia and New Zealand Banking Group (ANZ) was the first bank to launch its stablecoin $ADC last year. NAB has also announced that the bank is planning to launch a stablecoin called AUDN which aims to launch in the middle of 2023, according to the Australian Financial Review (AFR) report. This announcement came almost nine months after Australia and New Zealand Banking Group (ANZ) launched AUD-pegged stablecoin.

What is Stablecoin?

A type of cryptocurrency whose value is pegged to another asset class, such as a fiat currency or gold, to stabilize its price and is more efficient and cheaper than the interbank cross-border payments solution SWIFT. AUDN will be fully backed to the Australian dollar and the money will be held by the NAB.

ANZ’s stablecoin is also used for remittances and carbon credit trading. AFR reported that before the launch of ANZ’s stablecoin, all four biggest banks in Australia planned to co-launch a nationwide stablecoin which eventually failed due to competition concerns.

The Government of Australia is continuously exploring blockchain technology in the financial sector. Several individual Australian banks started developing their stablecoins after an attempt by the four biggest banks.

Applications of AUDN

  1. AUDN would allow its customers to transact on blockchain technology in real time using Australian dollars.
  2. It could be used for several other purposes including "carbon credit trading, overseas money transfers, repurchase agreements and reducing the cost of cross-border transactions."
  3. Adoption of blockchain technology by Australia.

Conclusion

NAB chief innovation officer Howard Silby reportedly informed the AFR that the bank's primary focus would be to use AUDN as a settlement token. With the use of AUDN, NAB wants to move towards “atomic” or instantaneous settlements from the current two days. Howard Silby claims that the bank believes strongly in blockchain technology. Adding more Silby said, NAB is convinced blockchain infrastructure will play a vital role in the future of finance. These are the few statements Silby said.

“We certainly believe there are elements of blockchain technology that will form part of the future of finance. From our view, we see blockchain has the potential to deliver instantaneous, transparent, inclusive, financial outcomes.”

AUDN stablecoin could be used in repurchase agreements — short-term loans in bond markets — and for “green deposits” linking customer savings to green loans.
Australia has also introduced token mapping to identify characteristics of all crypto tokens and how they are managed, processed, and the central bank of Australia has started a test to see the potential use cases for Australia's own CBDC, which is expected to be completed by mid-2023.

In regards to the safety of crypto, the Australian government has decided to tighten safety around crypto, also promised last month to establish a framework for the licensing and regulation of crypto service providers in 2023.

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