National Australia Bank launches stablecoin on Ethereum, Algorand: report

Several countries have planned to explore stablecoins despite initial reluctance and Terra’s recent implosion. The latest to jump on the bandwagon is one of Australia’s four largest financial institutions – National Australia Bank (NAB).

The new Australian dollar-pegged stablecoin created by the NAB, dubbed AUDN, is set to launch on the Ethereum and Algorand blockchain networks. Completion is scheduled for mid-2023.

Australia’s second stablecoin initiative

According to Australian Financial Review (AFR) report, the AUDN will allow users to conduct real-time transactions on the blockchain technology using Australian dollars. The NAB also said that the stablecoin will serve multiple purposes, such as trading in carbon credits, cross-border fund transfers, and repurchase agreements. Additionally, the bank will be responsible for custody of the Australian fiat-backed stablecoin.

In a statement, Howard Silby, NAB’s Chief Innovation Officer, was quoted as saying:

“We certainly believe 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.”

The current infrastructure for foreign transactions is dominated by the SWIFT network, which is undoubtedly a legacy system. However, launching AUDN could be an effective alternative for many users.

The development comes four months after Australian Senator Andrew Bragg drafted a bill aimed at placing the domestic cryptocurrency sector under strict oversight. The bill required digital asset exchanges and stablecoin issuers to disclose their operations to authorities. It also targeted Chinese banks trading the digital yuan in the country.

Other countries are trying stablecoins

With the creation of AUDN, NAB has become the second major bank in the country to launch an Australian dollar-pegged stablecoin on the Ethereum network. Last year, the Australia and New Zealand Banking Group (ANZ) embossed a stablecoin pegged to Australian fiat in partnership with crypto custodian Fireblocks.

Russia and Iran were reportedly locked in talks this week to launch a new gold-backed cryptocurrency. Alexander Brazhnikov, Executive Director of the Russian Association of the Crypto Industry and Blockchain, claimed that the token would be developed as a stablecoin.

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