National Bank of Australia Executes First Cross-Border Stablecoin Transfer
- The National Bank of Australia has confirmed that it has executed its first cross-border stablecoin transfer on a layer 1 public blockchain.
- The stablecoin used was AUDN which is pegged in 1:1 ratio to the Australian dollar and is built on the Ethereum blockchain.
- The transaction was initiated by a major bank, conducted on the Ethereum blockchain, and used smart contracts for seven currencies.
- These seven currencies included Australian, New Zealand, Singapore, and US dollars, as well as Euro, Japanese Yen, and Pound Sterling.
Regulators have been concerned about the usage of stablecoins and their benefits across the globe and are trying to integrate the technology behind these cryptocurrencies pegged in a 1:1 ratio to fiat currencies into the traditional finance system. Interestingly, the National Bank of Australia has confirmed that it has executed its first cross-border stablecoin transfer on a layer 1 public blockchain.
According to a statement released on March 14 by the National Bank of Australia, the stablecoin used to execute the transfer initiated by a major bank was the AUDN stablecoin, a blockchain-based crypto coin that is pegged in a 1:1 ratio to the Australian dollar.
Furthermore, the transaction was conducted on the Ethereum blockchain and used smart contracts for seven currencies. The stablecoins were freshly minted as bank liabilities on the ERC-20 standard.
“We believe that elements of the future of finance will be blockchain enabled and we’re already witnessing rapid change in the tokenization market. The stringent governance frameworks we have in place ensures we can support the creation of a safe and reliable digital financial system,” said NAB executive general manager for markets Drew Bradford.
These seven currencies included Australian, New Zealand, Singapore, and US dollars; euro; Japanese yen; and pound sterling, according to a post from Fireblocks, a digital asset custody, transfer, and settlement platform. It is crucial to note that the National Bank of Australia partnered with the Fireblocks platform and BlockFold professional services consultants on the project.
This transaction displayed the fact that transaction times can be cut down from days to minutes using blockchain technology and was a part of the plan orchestrated by the National Bank of Australia to simplify international banking protocols. The banking institution expects to start supporting the transactions of corporate and institutional clients involving digital assets by the end of the year.
Michael Shaulov, the CEO and co-founder of Fireblocks, noted that “Australia continues to be a global torch bearer for tokenization in financial services, with NAB leading the charge in the world’s first use case of a large financial institution leveraging a public blockchain for cross-border payment rails,” while adding:
“NAB’s successful trade execution marks the beginning of the evolution of financial services from Web2 to Web3, underpinned by blockchain technology as well as strong governance and risk management.”
As reported earlier by Bitnation, the National Bank of Australia completed the creation of the AUDN in January and also conducted internal testing, including transferring money between subsidiaries and branches.
NAB’s chief innovation officer, Howard Silby, confirmed that the plan is to launch the stablecoin sometime in mid-2023 and also include carbon credit trading and remittance services. Furthermore, the bank also aims to offer stablecoins in multiple currencies in jurisdictions where it has licenses.
Recently, Australia also overthrew El Salvador, the first country to adopt Bitcoin (BTC) as legal tender, to become the fourth largest crypto ATM hub in the world. Additionally, Australia installed a whopping 99 cryptocurrency ATMs during the last quarter of 2022, and as of January 1, 2023, the country had 219 active crypto ATMs, surpassing El Salvador by 7 ATMs.