National Australia Bank (NAB) just stepped onto the digital asset scene, announcing the launch of its stablecoin, dubbed AUDN.
According to a Thursday report from the Australian Financial Review, NAB is aiming to launch the AUDN stablecoin midway through this year, with the new Aussie-dollar-pegged stablecoin to focus on a number of different transactions, including the trading of carbon credits and sending money overseas.
The AUDN stablecoin will be fully backed one-to-one with the Australian dollar (AUD) and will be hosted on the Ethereum network.
While the main focus for AUDN is to be used as a settlement token — which allows for AUD-based transactions to be settled in real time — NAB’s Chief Innovation Officer, Howard Silby told the AFR that the stablecoin could also be used for short-term finance in bond markets.
Not only this but the AUDN is also intended to be used for “green deposits” which link customer deposits to environmentally-focused loans.
Silby added that there are a number of core elements of blockchain technology that will provide benefits in building the path forward for the world of traditional finance.
“We certainly believe there are elements of blockchain technology that will form part of the future of finance.”Howard Silby, NAB’s Chief Innovation Officer
“That continues to be the source of some debate. But certainly, from our point of view, we see [that blockchain] has the potential to deliver instantaneous, transparent, inclusive, financial outcomes,” he added.
At the beginning of last year, the largest banking institutions in Australia — also known as the ‘big four’ — tried to create an industry-wide stablecoin. However, as the AFR divulges, the project failed due to fears of internal competition and the fact that each bank was pursuing a range of different approaches to their respective cryptocurrency strategies.
Regardless, NAB’s move to launch an Ethereum-based AUD-pegged stablecoin is sending waves through the Australian financial industry, as the market begins to realise that core elements of blockchain technology may actually hold the keys to the future of digital finance.
Steve Vallas, the Technology Advisor at Skafold Global and Managing Director at Blockchain APAC told The Chainsaw that with the launch of the AUDN stablecoin, NAB is sending out a clear message to the wider market.
“The NAB is no doubt looking to send a message to the market that they are not just forward-looking, they are forward-acting,” Vallas said.
While many proponents of traditional finance remain sceptical of the crypto industry, which has developed a certain notoriety for its volatility and speculation, Vallas says that ultimately, they’re missing the deeper point.
“The NAB stablecoin initiative is not a crypto story, it’s a digital asset story. The use case for the distributed ledger technology that underpins payments infrastructure has momentum and traditional financial institutions understand they cannot stand still,” said Vallas.
“Regulators the world over are reinforcing the message that whilst speculative excesses and consumer harm is their target. The development of regulated entity use cases for the technology is not,” Vallas concludes.
NAB’s stablecoin comes nearly nine months after the competing Australian banking institution ANZ, launched its stablecoin called A$DC.