According to an Australian Financial Review report, one of Australia’s largest banks, National Australia Bank, is planning to launch an AUD-backed stablecoin on the Ethereum network. The NAB first minted AUDN on the ETH blockchain in December 2022 and burned it to remove it from circulation. The report says that AUDN has been created for specific use cases rather than floating on the crypto markets.
Use cases
The National Bank of Australia is aiming to launch AUDN for institutional clients by mid-year after internal testing, according to an AFR report. NAB is currently testing its AUDB stablecoin by transferring money between subsidiaries and branches.
As per the reports, the AUDN coin will enable NAB users to settle the transaction on the blockchain, focusing on carbon credits and reducing the cost of the cross-border transaction.
Howard Silby, Chief Innovation Officer of NAB, said their primary focus would be to use AUDN as a settlement token. With the help of AUDN, they aim to move towards atomic or instantaneous settlement from the current two days. He also said that they believe there are elements of blockchain technology that will form a part of the future of finance.
Silby added that the AUD-backed stablecoin could also be used in repurchase agreements, short-term loans in bond markets, and green deposits that link customers to green loans.
Rise in crypto adoption
According to some reports, National Australia Bank is planning to launch an AUD-backed stablecoin. However, they are not the first bank to launch their own stablecoins. Last year, ANZ was the first bank to launch its stablecoin(A$DC). Individual Australian banks started to develop their own stablecoins after an attempt by one of the four biggest banks of Australia to create an industry-wide stablecoin jointly fell apart last year.
DigitalX, a digital asset firm listed on the Australia Securities Exchange, is planning to use this stablecoin, once launched, to prove its reserves, the Australian Finance Review reported.
However, the Australian government is thinking of regulating cryptocurrencies, but it is still unclear if the stablecoins will be a part of the initial regulatory regime. Last year in September, a private member’s draft bill suggested the regulation of stablecoin issuers and placing disclosure requirements on them.
What are your thoughts on the plan of the largest bank in Australia, National Australia Bank, to launch its AUD-backed stablecoin, AUDN? Will it be a success for the firm? Let us know in the comments below. And, if you found our content informative, do share it with your family and friends.
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