Several countries have been planning to explore stablecoins despite initial reluctance and the more recent implosion of Terra. The latest to jump on the bandwagon is one of Australia’s four largest financial institutions: the National Australia Bank (NAB).
The new Australian dollar-pegged stablecoin created by NAB, dubbed AUDN, will launch on the Ethereum and Algorand blockchain networks. It is expected to be completed by mid-2023.
Australia’s Second Stablecoin Initiative
According to the Australian Financial Review (AFR) reportAUDN will allow users to settle transactions on blockchain technology in real time with the help of Australian dollars. The NAB also said that the stablecoin is designed to serve multiple purposes, such as carbon credit trading, cross-border money transfers, and repurchase agreements. In addition, the bank will be in charge of maintaining the fiat-backed Australian stablecoin.
In a statement, NAB’s chief innovation officer, Howard Silby, was quoted as saying:
“We certainly believe that there are elements of blockchain technology that will be part of the future of finance (…) From our point of view, we see that (blockchain) has the potential to deliver instant, transparent and inclusive financial results.”
The current infrastructure for foreign transactions is dominated by the SWIFT network, which is certainly a legacy system. However, the release of AUDN could provide an effective alternative for many users.
The development comes four months after Australian Senator Andrew Bragg drafted a bill aiming to put the nation’s cryptocurrency sector under strict supervision. The bill required digital asset exchanges and stablecoin issuers to disclose their operations to authorities. He also took aim at Chinese banks dealing with the digital yuan in the country.
Other countries dabbling in stablecoins
With the creation of AUDN, NAB has become the second major bank in the country to launch an Australian dollar-pegged stablecoin on the Ethereum network. Last year, the Australia and New Zealand (ANZ) Banking Group coined a stablecoin pegged to Australian fiat currency in collaboration with cryptocurrency custodian Fireblocks.
This week, Russia and Iran reportedly engaged in talks about launching a new gold-backed cryptocurrency. Alexander Brazhnikov, executive director of the Russian Association of the Crypto and Blockchain Industry, claimed that the token would be developed as a stablecoin.
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