National Australia Bank is developing an AUD-backed stablecoin that will be deployed on the Ethereum and Alogorand blockchains. AUDN will become the second stablecoin to be released by a private bank in the country after Australia and New Zealand Bank’s A$DC token.
The National Australia Bank (NAB), one of the largest commercial banks in the country, has launched a stablecoin backed by the Australian dollar. According to a top executive at the bank, the AUDN token will be launched on the Ethereum (ETH) and Algorand (ALGO) blockchains in the middle of 2023.
In an interview given to the Australian Financial Review (AFR), Howard Silby, Chief Innovation Officer at the bank says AUDN can be used to settle transactions on the blockchain in real-time using Australian dollars (AUD). Other use cases for the stablecoin include overseas money transfers, repurchase agreements and carbon credit trading.
AUDN will become the second AUD-backed stablecoin to be released by the country’s big four banks, after rivals Australia and New Zealand Bank (ANZ) minted its A$DC token. The Ethereum Virtual Machine (EVM) compatible stablecoin was launched in March 2022. ANZ collaborated with blockchain solutions providers Fireblocks, Chainalysis and OpenZeppelin to develop an “in-house purpose-built” smart contract for its cryptocurrency. In June, the token was used by Victor Smorgon Group, a private wealth management firm, to purchase carbon credits.
Initially, the country’s big banks planned to create a single industry-wide Australian dollar stablecoin. After the attempt failed due to each of them being at different terms with their crypto strategy, the banks decided to develop their own stablecoin.
Australia is working on transforming its financial system to incorporate cryptocurrencies. Last month, Prime Minister Anthony Albanese announced that his government is working on a regulatory framework for the country’s crypto industry. The Treasury department will release a consultation paper later this year that will map out the characteristics of every crypto token and how they will need to be regulated.
In September, the Australian Securities and Investments Commission (ASIC) increased the size of its crypto unit to ramp up oversight over the industry. However, the financial regulator clarified that it will not be an advocate for digital currencies. Meanwhile, the Reserve Bank of Australia (RBA) is moving ahead with its plans to introduce a central bank digital currency (CBDC). RBA will publish a detailed report on use cases of the digital AUD by mid-2023 after its pilot program is completed. The central bank revealed the digital dollar will be deployed on Quorum, an enterprise-grade private blockchain powered by the Ethereum network.
However, the crypto bear market has not been kind to the country’s developments in the sector. In November 2022, Cosmos Asset Management, the investment giant behind Australia’s first crypto exchange traded funds (ETF), applied to delist its Bitcoin and Ether ETFs after just six months of trading. Meanwhile, the Australian Securities Exchange (ASX) shut down development of its blockchain-based clearing system after incurring $170 million in losses.
At the time of writing, ETH is trading at $1,550 – up by 2% in the last 24 hours, and ALGO is trading at $0.21 – up by 3.7% in the same period.