National Australia Bank (NAB) is said to have made the first cross-border stablecoin transfer by a major financial institution on a layer 1 public blockchain. The intrabank transmission used the bank’s wholly backed, Australian dollar-pegged AUDN stablecoin.
The transaction was conducted on the Ethereum blockchain using smart contracts for seven currencies. According to a statement issued by Fireblocks, they were Australian, New Zealand, Singapore, and United States dollars, euros, Japanese yen, and British pounds.
The stablecoins were newly issued as ERC-20-compliant bank liabilities. NAB collaborated with the Fireblocks platform and BlockFold professional services consultants on this initiative. Drew Bradford, executive general manager for markets at NAB, stated:
“We believe that elements of the future of finance will be blockchain enabled and we’re already witnessing rapid change in the tokenisation market. The stringent governance frameworks we have in place ensures we can support the creation of a safe and reliable digital financial system.”
The bank stated that the pilot demonstrated the potential of the technology to reduce transaction delays from days to minutes and was part of NAB’s efforts to streamline international banking protocols. It added that corporate and institutional clients transacting in digital assets would be supported by the end of the year.
NAB’s stablecoin, the AUDN, deployed for instant cross-border payments.https://t.co/5gCUFm9ptJ
— Blockchain Australia (@BlockchainAUS) March 13, 2023
NAB is the second significant Australian bank to issue a stablecoin guaranteed by the Australian currency. According to a January announcement, the AUDN coin was created with cross-border transactions and carbon credit trading in mind. NAB was designated as one of the nine founding institutions of the international Carbonplace blockchain network in February.
Australia and New Zealand Banking Group, a competitor of NAB, issued the first Australian dollar-linked stablecoin, A$DC, in March 2022.
