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National Australia Bank (NAB) will become the second of the country’s major financial institutions to launch a stablecoin, a top executive told the Australian Financial Review (AFR).
The coin, dubbed AUDN, will launch on the Ethereum and Algorand blockchains later this year.
Howard Silby, NAB’s chief innovation officer, told AFR the stablecoin would allow customers to settle transactions on the blockchain in real-time, using Australian dollars.
NAB will be the second of Australia’s big four banks to launch a stablecoin, after rival Australia and New Zealand Bank (ANZ) minted its own, dubbed A$DC, last year.
Early uses of A$DC indicate that Aussie dollar stablecoins could play a role in Australia’s energy transition plans. In June, an investor used the stablecoin to purchase carbon credits.
NAB’s stablecoin will also allow for carbon credit trading, the AFR reported. Other functions could include cross-border payments and repurchase agreements.
Individual banks are working on their own stablecoins after a failed attempt to cooperate on a single industry-wide Australian dollar stablecoin. The project never got off the ground due to competition concerns and the different stages each bank was at in its crypto strategy.
Decrypt has contacted NAB for further comment.
Australia dives head first into crypto
Under Prime Minister Anthony Albanese, who came to power last May, Australia has pledged to modernize the country’s financial system and update its regulatory framework to adapt to crypto and other innovations.
Meanwhile, the country's central bank is moving ahead with a central bank digital currency (CBDC) project. A pilot of the scheme is due to be completed by mid-2023.
But it hasn’t all been plain sailing for crypto projects down under.
In November last year, the asset manager behind two of the country’s first crypto exchange-traded funds (ETFs) applied to delist the investment vehicles after just six months of trading, due to the global bear market.
A few days later, the Australian Securities Exchange (ASX) ditched a long-running project to update its clearing system using blockchain, incurring a write-off of $170 million.