National Australia Bank (NAB) appears to be going head to head with its own Central Bank in a race to launch its own stablecoin AUDN.
Earlier this month, Payments Cards & Mobile reported that the Reserve Bank of Australia is collaborating with the Digital Finance Cooperative Research Centre (DFCRC) on a research project to explore potential use cases and economic benefits of a central bank digital currency (CBDC) in Australia.
The project involves selected industry participants demonstrating potential use cases for a CBDC using a limited-scale pilot CBDC that is a real digital claim on the Reserve Bank.
Now, NAB has revealed it has completed an intra-bank cross-border transaction using NAB-issued stablecoin, which represents a world-first by a major financial institution on a layer-one public blockchain.
The pilot transaction on the public and permissionless Ethereum blockchain, involved deployment of stablecoin smart contracts for seven major global currencies.
The pilot’s success demonstrates the potential to cut cross-border transactions from days to minutes and brings NAB one step closer to enabling clients who operate in multiple jurisdiction and currencies a simpler and faster experience, starting with corporate and institutional clients.
NAB’s Australian stablecoin, AUDN, which will be fully backed one-for-one with the Australian dollar and managed as a liability of the bank, will be the cornerstone for NAB’s ambitions in digital assets.
In addition, transacting on a public, permissionless layer-one blockchain will allow for greater transparency, accessibility and scalability.
NAB Executive General Manager, Markets, Drew Bradford, said NAB was investing to develop Australia’s safest, simplest and most secure digital asset ecosystem, despite the clear intention of its Central Bank.
“We are committed to pursuing the right digital asset opportunities with clear customer benefits,” said Bradford.
“Bringing multi-currency stablecoins to market demonstrates NAB’s focus on simplifying international banking protocols to increase speed and transparency while lowering costs and reducing complexity for customers.
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.”