NAB AUDN Stablecoin Readied for Instant Cross Border Payments
(16 March 2023 – Australia) NAB will test FX transfers using the Ethereum blockchain and its own stablecoin as it seeks to release its digital version of the Australian Dollar (AUD) before a central bank digital currency (CBDC) floated by the Reserve Bank of Australia (RBA).
This pilot transaction on the public and permissionless Ethereum blockchain involved deployment of stablecoin smart contracts for seven major global currencies. NAB made transfers to subsidiaries in New Zealand, Singapore, Japan, the United States, Europe and the United Kingdom (UK).
The international currency transfers are the first global example of cross border, multi-currency exchange using a stablecoin issued by a major regulated financial institution. The transfers point to a future of rapid and cost effective cross border payments compared to the current system operated by SWIFT.
NAB plans to make AUDN available to its corporate and institutional banking (CIB) clients by the end of 2023, regardless of whether a CBDC is released by the RBA. NAB has partnered with leading technology providers Blockfold and Fireblocks for this pilot to build and deploy its stablecoins.
NAB became the second Big Four major to release its own stablecoin earlier this year, known as the “AUDN”, following ANZ launching its own similar offering referred to as “A$DC”. ANZ has also applied the technology to tokenised carbon credits. As stablecoins become widely used as a means of payment, the RBA is preparing to regulate them explicitly.
“We are committed to pursuing the right digital asset opportunities with clear customer benefits. Bringing multi-currency stablecoins to market demonstrates NAB’s focus on simplifying international banking protocols to increase speed and transparency while lowering costs and reducing complexity for customers,” commented NAB Executive GM for Markets, Drew Bradford.
“Later this calendar year, we will be doing real customer trades. We have a couple of clients who want to use the technology. We initially spoke to the RBA about it, but thought we will go along on our own path.”
“Now, if a customer wants to do an Aussie dollar payment from New York, they can’t do it in their working day as they have to wait for an Australian bank to open. But a stablecoin will let them do that instantly. There will be a cost saving, but it is not the driver for the clients we are talking to” Bradford added.