National Australian Bank to build stablecoin

National Australian Bank to build stablecoin

National Australian Bank to build stablecoin

The National Australian Bank (NAB) has developed a stablecoin known as AUDN, which will be launched in the mid of 2023, according to an Australian Financial Review (AFR) report. The NAB is among the four biggest banks in Australia. 

Launching AUDN aims to equip customers to make real-time transactions using Australian dollars on blockchain technology, per the NAB.

Howard Silby, NAB’s Chief Innovation Officer, informed AFR the use of AUDN is not only limited to settling payments via blockchain technology. However, there are various other uses, such as “carbon credit trading, overseas money transfers, and repurchase agreements.” 

The Australian stablecoin will be launched on the Ethereum and Algorand blockchains. Algorand blockchain is a similar smart contract platform as Ethereum.

Stablecoins are similar to other digital currencies like crypto; however, their values are tied to another asset class, for example, fiat currency or gold. As stablecoins are tied to an asset class, their prices can be stabilized, and they are a cheaper mode of payment for settling cross-border interbank payments, better than SWIFT.

AUDN will be fully backed by the Australian dollar for settling cross-border payments. Therefore, the money can be held and controlled by NAB.

NAB is the second Australian bank to understand the potential of stablecoins. Previous to this, Australia and New Zealand Banking Group (ANZ) collaborated with Fireblocks, a crypto custodian, to mint a stablecoin pegged to the Australian dollar.

Token mapping was introduced in Australia in August 2022 to work out a regulatory framework for crypto regulations in the country. It was also introduced to bracket crypto token characteristics and to understand their management. Central Bank of Australia has also started  a pilot test to discover the potential of Australian CBDCs, which will likely be closed in the middle of 2023.

Governments around the globe have become more vigilant when it comes to crypto laws and regulations. They have all braced themselves up to tighten securities. The government of Australia has also promised to establish a crypto framework and regulations around its services and services providers in 2023. 

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