The transaction, part of a NAB pilot for an AUD-backed stablecoin, involved deploying stablecoin smart contracts for seven major global currencies, showcasing the potential to shorten cross-border transactions from days to minutes.
NAB intends to issue its stablecoin under the ticker ‘AUDN,’ which will be managed as a liability on its books. The firm further plans to enable transactions for the Australian, New Zealand, Singapore, and US dollars, as well as the EUR, JPY, and GBP.
Digital asset infrastructure provider Fireblocks and fintech platform Blockfold assisted with the smart contracts, direct custody of the tokens (alongside minting and burning). NAB says its stablecoin was issued as an ERC-20 token.
As the bank representatives declare, they believe that elements of the future of finance will be blockchain-enabled and rapid change in the tokenisation market can already be observed. The bank claimed it’s the world’s first major financial institution to process a cross-border stablecoin transaction via a public Layer-1 blockchain. No transaction IDs or token contracts were provided in the press materials.
In any case, ANZ, another ‘big four’ Australian bank, became the first institution in the country to issue and conduct payment of a stablecoin linked to the nation’s AUD in 2022, also via Ethereum, although it wasn’t cross-border.
As well, JPMorgan alongside Singapore’s DBS Bank and others executed foreign exchange transactions using tokenised deposits, a slightly different concept to stablecoins, as part of a 2022 pilot. The group used Ethereum Layer-2 network Polygon for the trades.
At the end of February 2023 Coinbase launched the Base layer-2 network, secured on Ethereum, to make building decentralised apps more accessible. As some see it, Base could set a precedent for other cryptocurrency companies and financial institutions to use Ethereum as their main settlement layer. Coinbase is could potentially onboard the next 10 million users and institutions to Ethereum.
Still in February, Germany-based technology company Siemens issued its first digital bond on the Polygon blockchain in a bid to reduce paperwork. The EUR 60 million bond issued on the Polygon blockchain has a maturity of one year, and the company has not disclosed the interest rate.
Siemens officials cited by the same source said that paper bonds make paper-based global certificates and central clearing unnecessary. Moreover, the bond can be sold directly to investors without having to rely on the intermediary services of a bank. Siemens’ corporate treasurer revealed that, by moving away from paper and toward public blockchains for issuing securities, the company can execute transactions faster and more efficiently than when issuing bonds in the past.
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