National Australia Bank (NAB) has completed an intra-bank cross-border transaction using NAB-issued stablecoin, which represents a “world-first” by a major financial institution on a layer-one public blockchain.
This pilot transaction on the public and permissionless Ethereum blockchain “involved deployment of stablecoin smart contracts for seven major global currencies.”
The pilot’s success “demonstrates the potential to cut cross-border transactions from days to minutes and brings NAB one step closer to enabling clients who operate in multiple jurisdictions and currencies a simpler and faster experience, starting with corporate and institutional clients.”
NAB Executive General Manager, Markets, Drew Bradford, said NAB was “investing to develop Australia’s safest, simplest and most secure digital asset ecosystem.”
Mr Bradford said:
“We are committed to pursuing the right digital asset opportunities with clear customer benefits. Bringing multi-currency stablecoins to market demonstrates NAB’s focus on simplifying international banking protocols to increase speed and transparency while lowering costs and reducing complexity for customers.”
As noted in the update:
“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.”
NAB’s Australian stablecoin, AUDN, “which will be fully backed one-for-one with the Australian dollar and managed as a liability of the bank, will be the cornerstone for NAB’s ambitions in digital assets.”
In addition, transacting on a public, permissionless layer-one blockchain “will allow for greater transparency, accessibility and scalability.”
NAB has partnered with technology providers Blockfold and Fireblocks for this pilot to build and deploy its stablecoins.
This includes “leveraging their expertise for smart contract creation, securely minting and burning its stablecoin and managing the direct custody of the digital assets on the blockchain technology.”
Fireblocks CEO and Co-founder, Michael Shaulov, said:
“Australia continues to be a global torch bearer for tokenisation in financial services, with NAB leading the charge in the world’s first use case of a large financial institution leveraging a public blockchain for cross-border payment rails. NAB’s successful trade execution marks the beginning of the evolution of financial services from Web2 to Web3, underpinned by blockchain technology as well as strong governance and risk management”.
BlockFold CEO and Co-founder, Francois Schonken, said:
“NAB’s multi-currency cross border settlement execution on a public blockchain is exhilarating. This trade marks the first cross-border multi-currency exchange executed by a regulated large financial institution (NAB) backed stablecoin. The NAB eco-system of stablecoins puts in place cross-border payment rails that unlock tokenization potential for both real world assets and financial products”.