In a recent revelation, National Australia Bank (NAB) announced its plan to launch a fully backed stablecoin called AUDN.
NAB is one of Australia’s largest four financial institutions in terms of market capitalization. It has been said that the stablecoin will be launched on the Ethereum network and Algorand blockchain, a smart contract platform similar to Ethereum.
Reportedly, the bank is targeting to launch the stablecoin around mid-year. The stablecoin will be backed one-to-one with Australian fiat, and the bank will hold the money.
Howard Silbyt, the Chief Innovation Officer at NAB, said that the stablecoin would be primarily used as a settlement token between multiple parties involved in the transactions. For example- AUDN could be used for carbon credit trading, overseas money transfers, and repurchase agreements.
Sources reveal that this is known as atomic settlement, something the NAB is attempting to transition to in some markets.
However, this is not the first time banks in Australia have tried to launch a stablecoin. Previously, four banks attempted to create a similar stablecoin product last year. But their initiative failed due to competition concerns and the four separate banks being at different stages in their crypto strategies.
Australia has been a relatively progressive nation in terms of crypto. According to a survey conducted in November 2021, Australians voted crypto as their second most preferred investment choice. Around 1,053 Australians were at least 18 years old and engaged in trading in securities, derivatives, or cryptocurrencies between March 2020 and November 2021.
According to the study, 44% of individuals said they owned cryptocurrency, making it the second most popular financial option; 25% of those investors said they were just investing in cryptocurrencies.
Recently, the country has also introduced a token mapping to identify the characteristics of all crypto tokens and how they are managed. On December 14, Jim Chalmers, the Australian Treasurer since May this year, revealed that the government is all set to release a consultation paper of its token mapping initiative in early 2023.
The central bank has also started a pilot test to explore potential use cases for Australia’s own CBDC, which is expected to be completed by mid-2023. In addition, last month, the Australian government promised to establish a framework for the licensing and regulation of crypto service providers this year.