The National Australia Bank (NAB) has taken the lead among major financial institutions by executing an intra-bank cross-border transaction utilizing stablecoins on a layer-one public blockchain.
The pilot transaction, which successfully demonstrated the capabilities of a public and permissionless Ethereum blockchain, involved launching stablecoin smart contracts for seven major global currencies. NAB’s AUDN, an Australian stablecoin, will be fully collateralized by the Australian dollar and treated as a liability of the bank.
This successful pilot showcases the potential to reduce cross-border transactions from days to just minutes, bringing NAB closer to offering clients operating across multiple jurisdictions and currencies a more straightforward and efficient experience. Drew Bradford, NAB’s Executive General Manager, Markets, stated that the bank is dedicated to exploring digital asset opportunities with clear advantages for customers.
He further stated,
“The introduction of multi-currency stablecoins illustrates NAB’s commitment to simplifying international banking processes to enhance speed and transparency while reducing costs and complexity for customers,”
NAB collaborated with leading technology providers Blockfold and Fireblocks, allowing the bank to utilize their expertise for the creation of smart contracts, the secure minting and burning of its stablecoin, and the management of direct custody of digital assets on blockchain technology. Fireblocks CEO and Co-founder, Michael Shaulov, remarked that the successful execution of the trade signifies the dawn of the transformation of financial services from Web2 to Web3, backed by blockchain technology and robust governance and risk management.
By the end of 2023, NAB anticipates supporting select corporate and institutional clients in transacting with digital assets. The transaction utilized NAB’s newly minted ERC-20 tokens. The bank aims to facilitate transactions across seven of the most widely used global currencies: Australian, New Zealand, Singapore and US dollars, Euro, Yen, and Pound Sterling.
The capability to transact on a public, permissionless layer-one blockchain will offer enhanced transparency, accessibility, and scalability. According to BlockFold CEO and Co-founder, NAB’s multi-currency cross-border settlement execution on a public blockchain is a significant milestone.
Francois Schonken stated,
“NAB’s ecosystem of stablecoins establishes cross-border payment infrastructures that unlock the tokenization potential for real-world assets and financial products,”
The successful pilot by NAB has highlighted the transformative potential of stablecoin transactions on international banking practices, boosting speed and transparency while cutting costs and lessening complexity for clients. With robust ambitions in digital assets and partnerships with Blockfold and Fireblocks, NAB is positioned at the forefront of the changing landscape of financial services.
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