Authors: Michael Bacina, Steven Pettigrove, Lola Hickey, Luke Misthos
National Australia Bank (NAB) is set to join big-four competitor ANZ in launching its own stablecoin called AUDN by mid-2023.
AUDN will be minted on the Ethereum blockchain and will be backed one-for-one with fiat currency, in this case Australian dollars held by NAB. The AUDN stablecoin will offer NAB customers the ability to settle transactions in real time, including when sending money overseas or trading carbon credits.
NAB’s Head of Innovation, Howard Silby said:
We certainly believe there are elements of blockchain technology that will form part of the future of finance… That continues to be the source of some debate. But certainly, from our point of view, we see [blockchain] has the potential to deliver instantaneous, transparent, inclusive, financial outcomes.
Stablecoins are a sensible entry point into blockchain and Web3 for large financial groups as they are well positioned to offer trusted asset-backed tokens. NAB’s launch may spur on further investment and research as its customers are exposed to the benefits of blockchain technology.
Although blockchain technology and cryptographic tokens are yet to reach their full potential, it is significant that two of the ‘big four’ banks in Australia have seen benefits in adopting stablecoins in some capacity. NAB intends to use AUDN as a settlement token, allowing for transfers and transactions to be settled instantly.
Digital asset specialist, DigitalX, has promised to use AUDN to prove reserves in digital asset funds and create real-time settlements.
The Governor of the Reserve Bank of Australia (RBA), Phillip Lowe, has previously endorsed the benefits of stablecoins describing them as:
the one piece of the crypto landscape where I think there is real promise
Meanwhile, late last year, the RBA confirmed that Australia’s Council of Financial Regulators (CFR) is working on options to incorporate payment stablecoins into the regulatory framework for stored-value facilities. NAB and ANZ are reported to be working closely with financial regulators on the regime.
With two of Australia’s major banks now backing stablecoins, the future for stablecoins as one part of Australia’s evolving payments landscape looks bright.
