National Australia Bank mints stablecoin in blockchain push

NATIONAL Australia Bank has created its own stablecoin pegged to the Australian dollar, a move that it says will help large institutional customers with transactions that use blockchain technology. 

The Melbourne-based lender will start testing the token – named AUDN – before expanding its use cases and getting feedback on the needs of corporate clients, National Australia said in a LinkedIn post. It follows the unveiling of a stablecoin last year by Australia & New Zealand Banking Group. 

Stablecoins are intended to hold a set value, for example $1, and come in a variety of forms. Some are underpinned by a matching reserve of assets like cash and bonds.

“Elements of the future of finance will be blockchain enabled because it has the potential to help deliver instantaneous, transparent, and inclusive financial outcomes for customers as our economy becomes increasingly digitised,” National Australia’s chief innovation officer Howard Silby said in the post.

“Our focus is very much on looking at use cases where there is high friction and clear customer benefit particularly for larger businesses,” he added.

The TerraUSD ecosystem, a stablecoin that relied on complex algorithms and trader incentives, suffered a US$60 billion wipeout last year, roiling the digital-asset sector.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Regulators subsequently intensified scrutiny on how issuers support their tokens as part of wider pressure for more transparency in crypto. BLOOMBERG