National Australia Bank (NAB) says it has carried out the first cross-border stablecoin transfer by a major financial institution on layer 1 public blockchain. Intrabank transfers use the bank-backed stablecoin AUDN, which is pegged to the Australian dollar.
The transaction is carried out on the Ethereum blockchain and uses smart contracts for seven currencies, according to a statement released on March 14 by the bank. These currencies are the Australian, New Zealand, Singapore and United States dollars, as well as the euro, Japanese yen and the British pound, according to a statement released by Fireblocks.
New stablecoins are printed as bank obligations in the ERC-20 standard. NAB is partnering with Fireblocks platform and professional services consultant BlockFold on the project. NAB executive general manager for markets Drew Bradford commented:
“We believe that the financial elements of the future will be blockchain-enabled and we have witnessed rapid changes in the tokenization market. The strict governance framework we have in place ensures that we can support the creation of a safe and reliable digital financial system.
The pilot demonstrates the technology’s potential to reduce transaction times from days to minutes and is part of NAB’s focus on simplifying international banking protocols, the bank said. They added that they will support corporate and institutional clients who transact in digital assets by the end of the year.
NAB’s stablecoin, AUDN, is deployed for fast cross-border payments.https://t.co/5gCUFm9ptJ
— Blockchain Australia (@BlockchainAUS) March 13, 2023
NAB is the second major Australian bank to issue a stablecoin backed by the Australian dollar. The AUDN coin was designed with the aim of cross-border transfers and trading of carbon credits, according to an announcement made in January. In February, NAB was listed as one of the nine founding banks that created the international Carbonplace blockchain carbon credit transaction network.
Related: Digital assets could add $40B a year to Aussie GDP: Technology Council report
Australia’s NAB competitor and New Zealand Banking Group is the first bank to issue a stablecoin linked to the Australian dollar, A$DC, in March 2022.