National Australia Bank Becomes Second Australian Bank to Build Stablecoin: Report

The National Australia Bank (NAB), one of the four biggest Australian banks, has created a stablecoin called AUDN, which it aims to launch in the middle of 2023, according to the Australian Financial Review (AFR) report.

The purpose of AUDN would be to allow its customers to settle transactions on blockchain technology in real time using Australian dollars, NAB said. AUDN could also be used for several other purposes including "carbon credit trading, overseas money transfers and repurchase agreements," NAB’s Chief Innovation officer Howard Silby told AFR.

The stablecoin will launch on the Ethereum and Algorand blockchains, the latter a smart contract platform similar to Ethereum.

A stablecoin is a type of cryptocurrency whose value is pegged to another asset class, such as a fiat currency or gold, to stabilize its price. It is considered to be more efficient and cheaper than the interbank cross-border payments solution SWIFT. In this case, the AUDN will be backed fully to the Australian dollar and the money will be held by the NAB.

NAB is the second major Australian bank to be involved in the creation of a stablecoin. Earlier, Australia and New Zealand Banking Group (ANZ) teamed up with crypto custodian Fireblocks to mint a stablecoin pegged to the Australian dollar.

Australia has introduced token mapping to identify characteristics of all crypto tokens and how they are managed, and its central bank has started a pilot test to explore potential use cases for Australia's own CBDC, expected to be completed by mid-2023.

In an effort to tighten safety around crypto, the Australian government promised last month to establish a framework for the licensing and regulation of crypto service providers in 2023.

Read More: Fireblocks and ANZ Create AUD Stablecoin