The National Australia Bank (NAB) has joined the stablecoin race as it plans to launch a stablecoin pegged to the Australian dollar (AUD) on the Ethereum network. This will make it the second “Big 4” bank in Australia to do so.
NAB To Launch AUD-pegged Stablecoin In Mid-2023
The Australian Financial Review (AFR), the first to break the news, added that the launch would occur mid-2023. Entities will use AUDN stablecoin for carbon credit trading and cross-border remittances.
Howard Silby, the chief innovation officer at NAB, said the bank chose to mint the stablecoin because it believes in blockchain technology. According to Silby, blockchain technology will also revolutionize the financial sector.
“We believe blockchain will form a great part of the financial sector in the future. Blockchain can provide inclusive, instantaneous, and transparent financial outcomes,” Silby added.
Meanwhile, Silby noted that using AUDN for real-time cross-border transactions could be an improvement. It will allow customers to bypass the slower and more expensive SWIFT network.
Additionally, he cited using AUDN for carbon credit trading and other tokenized real-world assets as another potential application. According to Silby, the bank plans to offer stablecoins in different currencies in jurisdictions where it holds licenses.
Notably, NAB’s AUDN announcement is coming nine months after its competitor, Australia, and New Zealand Banking Group (ANZ), introduced 30 million ADC tokens in March. ANZ’s stablecoin can also work for carbon trading and cross-border remittances.
More Banks Are Embracing Blockchain Technology
Before NAB and ANZ began their stablecoin projects, both banks discussed partnering with Westpac and Commonwealth Bank of Australia, which are also part of Australia’s “Big Four” banks. The partnership aimed to issue a national stablecoin pegged to the AUD.
Unfortunately, the AFR stated that the project did not go as planned due to competition. Also, the banks were at different phases in their stablecoin strategy and adoption.
Jonathon Miller, Kraken Australia’s managing director, stated that banks are now embracing the possibilities of blockchain technology. He highlighted that blockchain technology provides technical advantages over conventional systems.
“Financial institutions such as NAB and ANZ are now embracing crypto technology due to its potential to make the financial system more efficient. This shows that crypto technology has a competitive advantage over the conventional payment system,” Miller said.
The managing director believes this will continue till financial institutions adopt tokens and crypto use in Australia. However, it is still unclear how these stablecoins issued by private banks would coexist with the e-AUD. The e-AUD is the CBDC under development by the Reserve Bank of Australia.
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