Home CryptocurrencyBitcoin Aussie ‘Big 4’ bank mints stablecoins for carbon trading and transfers

Aussie ‘Big 4’ bank mints stablecoins for carbon trading and transfers

by SuperiorInvest

National Australia Bank (NAB) is set to become the second Australian “Big 4” bank to launch an Australian dollar stablecoin on the Ethereum network.

Set to launch sometime in mid-2023, the AUDN stablecoin is aimed at streamlining cross-border transfers and trading of carbon credits, according to to a January 18 report from the Australian Financial Review (AFR).

NAB Chief Innovation Officer Howard Silby said the decision to mint the AUDN stablecoin on Ethereum – which is backed 1:1 by the Australian dollar (AUD) – was based on their belief that blockchain infrastructure will play a key role in the further development of finance. :

We certainly believe that there are elements of blockchain technology that will be part of the future of finance […] From our point of view we see [blockchain] has the potential to deliver immediate, transparent, inclusive financial results.”

Implementing AUDN for real-time cross-border transfers could become a way for customers to bypass the slower and more expensive SWIFT payment network.

Carbon credit trading and other forms of real-world tokenized assets will also be a major use case for AUDN, Silby said. He also added that they plan to offer stablecoins in “multiple currencies” where the bank has licenses.

NAB’s announcement of AUDN comes nine months after rival Australia and New Zealand Banking Group (ANZ) has launched 30 million tokens of its own stablecoin tickered A$DC in March 2022, which is also used for international transfers and carbon trading.

Prior to the ANZ and NAB stablecoin projects, the two banks originally planned to team up with Australia’s other two “Big 4” banks – the Commonwealth Bank of Australia (CBA) and Westpac – to jointly launch a nationwide AUD-backed stablecoin.

But it failed due to competition concerns and banks at various stages of adoption and strategy, the AFR explained.

NAB, one of Australia’s “Big 4” banks, is set to launch its own stablecoin in mid-2023. Source: PYMNTS.

Jonathon Miller, Australian managing director of crypto exchange Kraken Australia, told Cointelegraph that banks are beginning to recognize the technical advantages that blockchain infrastructure offers over traditional legacy systems:

“The continued adoption of crypto by financial institutions such as ANZ and now NAB for its potential to create significant efficiencies in the financial system […] is an express acknowledgment [blockchain’s] competitive advantage over traditional payment systems.

“We expect this trend to continue and inevitably evolve to include the adoption of various other cryptocurrencies and tokens for growing use cases in the Australian economy,” he added.

Related: A stablecoin framework is a short-term priority for Australian regulators

It remains to be seen how these stablecoins issued by private banks would work in tandem with the Reserve Bank of Australia’s eAUD – a central bank digital currency (CBDC) – which is currently in the pilot phase.

However, NAB is confident that both will be able to operate simultaneously and have their own set of unique use cases.

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