National Australia Bank Launches Stablecoin on Ethereum Network, Algorand Blockchain
After the collapse of Terra’s UST, people from space had become skeptical of stablecoins, especially the algorithmic ones. In time, however, the eroded trust was earned back. Right from market participants accumulating it like dry powder in anticipation of a bull run, to entities launching their own variants, the space has seen great development on this front.
The Australian Financial Review reported on Thursday that National Australia Bank has created its own stablecoin, AUDN. The same will allow customers to settle transactions using blockchain technology in real-time using Australian dollars.
In particular, the bank intends to launch the stablecoin in the middle of the year for transactions. It will be set up on the Ethereum network and the Algorand blockchain. NAB’s stablecoin is fully backed, one-to-one by the Australian dollar.
NAB plans to launch stablecoins in ‘multiple currencies’
Commenting on the latest development, NAB’s Chief Innovation Officer, Howard Silby, said
“We certainly believe that there are elements of blockchain technology that will form part of the future of finance. That continues to be the source of some debate. But certainly, from our point of view, we see [blockchain] has the potential to deliver immediate, transparent, inclusive, economic results.”
Apart from using the stablecoin for daily transactions and cross-border transfers, the executive revealed that it could also be used in repurchase agreements in the bond market and for “green deposits.” However, the main focus will still be on using AUDN as a settlement token.
Commenting on the lessons learned from the UST saga last year, former NAB chief and current DigitalX CEO Lisa Wade said
“What we learned from Luna last year is that insight into the stablecoin’s back book is the most important thing: if it’s not constructed correctly, there’s counterparty risk.”
Over the next quarter, NAB will internally test the stablecoin by moving money between subsidiaries and branches. Only when everything is done and dusted will the AUDN be launched.
Revealing NAB’s future plans, Silby said,
“We plan to offer stablecoins in multiple currencies in jurisdictions where NAB has licenses.”
Other prominent Australian players have also dipped their toes in the space. Towards the end of Q2 last year, Novatti Group confirmed that the agreement with Ripple and Stellar to build its AUDC stablecoin was on. Eventually, the stablecoin was launched last November on the Stellar blockchain.
Read more: Ripple, Stellar to help Novatti launch AUDC stablecoin
