The massive potential and ability of blockchain, as well as stablecoins, have resulted in the growing awareness of the technology, and its continuous adoption attracts big firms and entities to utilize it. The latest notable adopter of blockchain technology is now the National Australia Bank (NAB).
According to a report published by Australian Financial Review on January 19, citing sources, NAB, one of the major banks in Australia, will be introducing a fully backed stablecoin called AUDN that will boost the digital economy in Australia and allow business customers to settle transactions in Australian dollars on the blockchain.
Australia Draws Blockchain Technology Closer
As companies have started to recognize the blockchain as part of the evolving side of technology, many products have been built on the blockchain. The NAB stablecoin is not an exception, as it is said to be built on the Ethereum network.
NAB chief innovation officer Howard Silby noted, “We certainly believe 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 instantaneous, transparent, inclusive financial outcomes.”
The NAB stablecoin is backed one-to-one with Australian fiat. Following its minting on the Ethereum blockchain in December last year, AUDN is slated for launch mid-year for several use cases, including the execution of transactions, trading of carbon credits, and sending money overseas.
Aside from these listed use cases, Silby added that the NAB stablecoins could also be used in repurchase agreements, a form of short-term finance in bond markets, and for “green deposits,” which link customer savings to green loans. However, the main focus would be to use the AUDN stablecoin as a settlement token.
AUDN Stablecoin To Undergo Thorough Testing
Though the launch for the NAB stablecoin has already been put into place since it was minted, the AUDN will not be available to customers for at least three months. Silby said the AUDN can’t be available for more widespread use yet as it will have to undergo a proper internal testing route which is expected to commence “shortly.”
“We will shortly start testing our stablecoin with internal transactions before we look to expand the use cases working closely with the needs of our corporate clients,” said Silby. Adding that conversations with regulators on AUDN had been “constructive.”
With the government recommending it would regulate crypto custodians as part of its regulatory reforms, Silby believes NAB has a big role to play “in the safe storage of digital assets” for institutional and high net-worth customers, suggesting it could become licensed under any new regime.
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Notably, after minting the AUDN stablecoin in December last year on the Ethereum blockchain, the NAB “burned” the coin to remove it from circulation. Currently, the AUDN does not float in crypto markets but is created for specific use cases.
Regardless of the extreme market conditions, other major Australian banks are also seen transitioning into a stablecoin economy. ANZ already completed its own stablecoin transaction in an Australian first, with a cryptocurrency called A$DC.
Overall the cryptocurrency market has so far experienced a mini bull run over the past week, increasing the global cryptocurrency market capitalization by more than 10% from the $800 billion zone seen late last year to exceed $1 trillion early this week.