National Australia Bank creates stablecoin backed by Australian dollar

• The Australian stablecoin will be called AUDN.
• It will be backed one-for-one by the Australian dollar.
• Users will be able to settle transactions using blockchain technology using the stablecoin.

Despite people within the stablecoin space being extremely sceptical, especially after the collapse of the once mighty Terra UST stablecoin, entities have been launching their own stablecoin variants and the Australian Bank has joined the bandwagon.

The Australian Financial Review on Thursday reported that the National Australia Bank (NAB) is creating a stablecoin called the AUDN that will be backed by the Australian dollar. The news comes right on the heels of Iran and Russia announcing that they will develop a gold-backed stablecoin.

Anticipated AUDN launch date

According to the report, NAB anticipates launching the stablecoin mid this year.

The stablecoin will run on the Ethereum network and Algorand blockchain and will be fully backed by the Australian dollar one-for-one. It will allow Australian citizens to settle transactions using blockchain technology in real-time using the Australian dollar. Users will also be able to use the stablecoin in bond market repurchase agreements and for “green deposits” besides settling transactions and cross-border remittances.

Commenting on the development, the Chief Innovation Officer at NAB, Howard Silby, said:

“We certainly believe there are elements of blockchain technology that will form part of the future of finance. That continues to be the source of some debate. But certainly, from our point of view, we see [blockchain] has the potential to deliver instantaneous, transparent, inclusive, financial outcomes.”

Stablecoins backed by other currencies

Silby also revealed that the bank is also planning to launch several other stablecoins backed by different other currencies in jurisdictions where the bank is licensed. He said:

 “We are planning to offer stablecoins in multiple currencies in jurisdictions where NAB has licenses.”

The NAB is currently testing the stablecoin by using it to move money between subsidiaries and branches. The bank joins other Australian players like the Novatti Group which towards the end of the second quarter of 2022 confirmed it was working on its stablecoin project called AUDC stablecoin.