NAB Australian dollar-pegged stablecoin will be used for cross-border payments and carbon credit trading.
National Australia Bank (NAB), one of the four largest financial institutions in the country in terms of market capitalization, earnings, and customers, is reportedly planning to roll out an Australian dollar-pegged stablecoin.
According to the news report shared by the Australian Financial Review on January 18th, the stablecoin is set to be launched on the Ethereum network in mid-2023.
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Upon the launch, the Australian dollar-pegged stablecoin will be used to trade carbon credits and conduct cross-border payments.
The Chief Innovation Officer (CIO) of the National Australia Bank, Howard Silby, claims that NAB believes that blockchain technology will significantly impact the future of finance.
We certainly believe there are elements of blockchain technology that will form part of the future of finance <...> From our point of view, we see <blockchain> has the potential to deliver instantaneous, transparent, inclusive, financial outcomes.
The National Australia Bank is not the only banking institution in the country launching a similar product. In March 2022, Australia and New Zealand Banking Group (ANZ) created the Australian dollar-pegged stablecoin, A$DC. Similar to NAB’s stablecoin, A$DC is used for carbon trading and sending funds to different countries.
It is worth noting that, initially, NAB and ANZ, together with the other two “Big Four” Australian Banks, Commonwealth Bank of Australia and Westpac, planned to launch an “industry-wide Australian dollar stablecoin.”
The Australian Financial Review claimed that the attempts failed due to “ competition concerns and banks being at different stages in their crypto strategy.”
Crypto exchange Kraken Australia managing director Jonathon Miller claims that the adoption of crypto technology shows that banks are acknowledging the “competitive advantages” of crypto compared to traditional payment systems.
The persistent adoption of crypto technology by financial institutions like ANZ and now NAB for its potential to create significant efficiencies in the financial system <...> is an explicit recognition of the competitive advantage over traditional payment systems.
While the banks in Australia are looking to launch the Australian dollar-pegged stablecoins, The Department of the Treasury revealed its plans to improve crypto-related regulations and rules for its service providers in 2023.
