The Australian Central Bank has issued stablecoins in the form of AUDN on the Ethereum and Algorand blockchains.
Howard Silby who is the chief innovation officer at NAB, stated that the choice to mint the AUDN stablecoin, which would be supported 1:1 by the Australian dollar (AUD), was centered on the bank's faith that crypto facilities would perform a vital role in the forthcoming progression of Finance.
The stable crypto currency known as AUDN has been introduced by the National Australia Bank (NAB), one of Australia's central banks.
According to a report published (1) in the Australian Financial Review (AFR), the launch of the stablecoin is scheduled to take place in the middle of this year.
The National Australia Bank (NAB) will eventually become the second member of Australia's "Big 4" financial institutions to launch an Australian dollar-backed stablecoin on the Ethereum Network.
NAB Chief Innovation Officer Howard Silby has declared in the past that the action to mint the stablecoin, was done due to the bank's belief that blockchain creation will play a significant role in the next progression of Finance.
Purpose of AUDN
According to Silby, the purpose of AUDN is to allow clients to use Australian Dollars to settle money transfers based on Blockchain Technology in real-time.
The possibility exists for AUDN to be utilized for other purposes, such as the trade of carbon credits, the transfer of funds internationally, etc. The debut of the stablecoin will take place on the Ethereum and Algorand blockchains, which together provide a platform for executing tiny contracts.
Customers may find it more comfortable and cost-effective to avoid using the cumbersome and time-consuming SWIFT payment network if an application of AUDN is developed for real-time cross-border transfers.
According to Silby, the trade of carbon credits and other tokenized physical assets will be a prominent use case for the AUDN. In addition, he mentioned that the business has plans to distribute stablecoins in several different currencies, all of which are authorized by the bank.
Nine months after the competitor Australia and New Zealand Banking Group (ANZ) revealed thirty million tokens of their stablecoin that can also be used for international transfers and carbon trading, the National Australia Bank (NAB) disclosed the AUDN.
Stablecoins are such digital currencies where their values are pegged to to another asset, such as a fiat currency or gold. It is considered more efficient and less costly than the SWIFT systems for cross-border interbank payments.
Before launching their respective stablecoin initiatives, ANZ and NAB concluded that they would work together with the other two members of Australia's "Big Four" financial institutions, the Commonwealth Bank of Australia and Westpac, to co-launch a pan-Australian stablecoin that the AUD would back.
Competition difficulties and the fact that different banks were at different stages in their acceptance and strategy contributed to the initiative's lackluster degree of success.