- K Kim and S Pettigrove
NAB nabs first Australian cross-border stablecoin settlement
NAB has conducted a pilot transaction on the Ethereum blockchain successfully deploying its AUDN stablecoin for a cross border intra-bank transaction. The transaction, while quite small, was the first of its kind for a major financial institution in Australia.
NAB's stablecoin, the AUDN, is backed one-for-one with Australian dollars and is central to realizing NAB’s ambitions in the digital asset ecosystem. The reserves backing the AUDN will be held in audited, segregated accounts at the bank and managed as a liability of the bank.
According to NAB, its stablecoin project is intended to simplify international banking, increasing transparency and lowering costs for customers. NAB plans to enable customers to conduct more efficient settlement in multiple major currencies using stablecoins.
NAB’s executive general manager for markets stated:
We believe that elements of the future of finance will be blockchain enabled and we’re already witnessing rapid change in the tokenisation market. The stringent governance frameworks we have in place ensures we can support the creation of a safe and reliable digital financial system.
NAB says it will offer the AUDN stablecoin to corporate and institutional clients by the end of 2023:
Later this calendar year, we will be doing real customer trades. We have a couple of clients who want to use this technology.
Meanwhile, the RBA has announced details of its pilot project for a central bank issued digital Australian dollar. One of the pilot projects announced last week will involve using a CBDC for foreign exchange settlement. The race to deploy blockchain technology to allow efficient cross border payment and remittance is heating up.