{"id":41692,"date":"2023-01-19T08:34:50","date_gmt":"2023-01-19T08:34:50","guid":{"rendered":"http:\/\/egrowonline.com\/?p=41692"},"modified":"2023-01-19T08:34:50","modified_gmt":"2023-01-19T08:34:50","slug":"a-competitive-advantage-over-traditional-payments-nab-creates-audn-stablecoin-on-ethereum","status":"publish","type":"post","link":"http:\/\/egrowonline.com\/?p=41692","title":{"rendered":"‘A competitive advantage over traditional payments’: NAB creates AUDN stablecoin on Ethereum"},"content":{"rendered":"


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Stablecoins are incredibly important* to the wider crypto ecosystem, but they suffered a PR problem last year. Trust is returning, though \u2013 and major bank NAB jumping into the fray helps that.<\/p>\n

The reason so much scepticism rose around this crypto sector can largely be put down to the collapse of the Terra ecosystem last year and its UST \u201calgorithmic\u201d stablecoin, which helped spark a crypto-company \u201ccontagion\u201d and push the space deep into a bear market it hasn\u2019t really recovered from. Yeah, FTX didn\u2019t help, either.<\/p>\n

It wasn\u2019t the first algo stablecoin to depeg from the US dollar, but it was easily the biggest and most dramatic to that point.<\/p>\n

To be fair, leading cash and treasuries-backed<\/em> stablecoins USDC and USDT have kept their pegs pretty much intact throughout.<\/p>\n

Now, though, as reported<\/a> by the Australian Financial Review<\/em> today, the National Australia Bank (NAB) has developed its own asset-backed stablecoin, dubbed AUDN. It\u2019ll be backed one for one with AUD, held by the NAB.<\/p>\n

Why? Well, namely to allow allow its crypto-savvy customers to settle transactions using blockchain technology in real-time using Australian dollars. Because blockchain and digital currencies \u2013 they\u2019re the future, didn\u2019t you know?<\/p>\n

*Why are they important? Because (when they\u2019re actually stable) they help to minimise price volatility, making them useful as a reliable store of value and medium of exchange within the crypto-transacting space. There are other reasons, including the facilitation of DeFi, but that\u2019s mainly it.\u00a0<\/em><\/p>\n

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Australia\u2019s 2nd biggest bank, NAB, is launching a stablecoin called AUDN on the Ethereum network. <\/p>\n

Could widespread bank adoption of L1 networks to power stablecoins be a bullish thing for crypto?<\/p>\n

\u2014 Miles Deutscher (@milesdeutscher) January 19, 2023<\/a><\/p>\n<\/blockquote>\n

\u00a0<\/p>\n

\u2018Instantaneous, transparent, inclusive\u2019<\/h2>\n

Per the report, the NAB has revealed it\u2019s aiming to launch AUDN mid-year for transactions. And which blockchain is it being built on? That\u2019s right \u2013 Dogecoi\u2026 joking. Ethereum, of course.<\/p>\n

Actually, it\u2019s not<\/em> just Ethereum, it\u2019ll also be facilitated using the highly respected smart-contract chain Algorand as well \u2013 one of several Ethereum competitors.<\/p>\n

As the AFR<\/em> notes, it\u2019s the second stablecoin being created by a major Australian banking entity. ANZ created a similar coin last year, called A$DC<\/a>.<\/p>\n

Commenting on the development, NAB\u2019s Chief Innovation Officer, Howard Silby said:<\/p>\n

\u201cWe 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.\u201d<\/p>\n

Australia\u2019s big four banks attempted to create an industry-wide Australian dollar stablecoin last year. This didn\u2019t pan out due to issues around competition and non-aligned stages of crypto strategy, reported the AFR<\/em>.<\/p>\n

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AUDN will largely be used as a settlement token between multiple transacting parties \u2013 simultaneously via what\u2019s known as atomic settlement.<\/p>\n

It could also be utilised for carbon-credit trading, overseas money transfers and repurchase agreements, said Silby.<\/p>\n

\u00a0<\/p>\n

A trend that\u2019s expected to continue<\/h2>\n

For some crypto-industry commentary, Stockhead grabbed some thoughts from Jonathon Miller \u2013 Kraken\u2019s managing director in Australia.<\/p>\n

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Miller noted that the adoption of crypto technology by big player financial institutions, such as ANZ and now NAB, has been \u201cpersistent\u201d.<\/span><\/p>\n

He added that these entities can see the \u201cpotential to create significant efficiencies in the financial system \u2013 such as instant settlement, atomic swaps, smart contracts and other programmatic potential\u201d \u2013 and that it is \u201can explicit recognition of the competitive advantage over traditional payment systems\u201d.<\/span><\/p>\n

\u201cWe expect this trend to continue, inevitably evolving to include the adoption of various other cryptocurrencies and tokens for increasing use cases in the Australian economy,\u201d Kraken Australia\u2019s boss concluded.<\/span><\/p>\n<\/div>\n

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