National Australia Bank Becomes the Second Australian Financial Institution to Develop Stablecoin

By Jeet Adhvaryu On Jan 20, 2023

According to a report by the Australian Financial Review (AFR), the National Australia Bank (NAB), one of the four largest Australian banks, has devised a stablecoin dubbed AUDN, which it plans to introduce in the middle of 2023.

NAB said that AUDN will enable its clients to settle blockchain-based transactions in real-time using Australian dollars.

AUDN may potentially be used for carbon credit trading, international money transfers, and repurchase agreements, according to NAB’s Chief Innovation Officer Howard Silby.

Stablecoins are a sort of cryptocurrency whose price is stabilized by being tied to another asset class, such as a fiat currency or gold. It is regarded as more efficient and less expensive than the SWIFT method for interbank cross-border payments. In this situation, the AUDN will be completely backed by the Australian dollar, with the NAB holding the funds.

The National Australia Bank is the second major Australian bank to participate in the establishment of a stablecoin. Earlier, Australia and New Zealand Banking Group (ANZ) collaborated with crypto custodian Fireblocks to produce an Australian dollar-backed stablecoin.

Australia has implemented token mapping to determine the properties of all crypto tokens and how they are maintained, and its central bank has begun a pilot test to investigate possible use cases for Australia’s own CBDC, which is scheduled to be finished by mid-2023.

In an attempt to increase crypto security, the Australian government pledged last month to develop a licensing and regulating framework for crypto service providers by 2023.