One of Autralia’s leading banks, the National Australia Bank (NAB) has completed its first cross-border payment with its Audtralian Dollar (AUD) backed stablecoin.
The bank announced the breakthrough in a press release on 14 March, which is the first time any major bank has tranferred stblecoins across borders using a layer 1 blockchain. The transaction which occurred on the Ethereum blockchain used smart contracts for seven currencies.
Stablecoins Freshly Minted on Ethereum
The stablecoins were minted on the Ethereum blockchain as well, using the ERC-20 standard. The seven cryptocurrencies used were Australian, New Zealand, Singapore and United States Dollars, as well as Euros, Japanese Yen and British Pounds.
NAB was able to achieve this feat in collaboration with BlockFold, a company that specializes in tokenization and smart contract development. It also worked with Fireblocks, a platform used for creating new blockchain based products, and manage digital asset operations.
Executives of the two companies in a statement said that the successful completion of the transaction “unlock tokenization potential for both real world assets and financial products.”
NAB Developing Secure Digital Asset Ecosystem
In a statement, the executive general manager for markets at NAB, Drew Bradford said that the project is part of efforts by the bank to develop a “safe and reliable digital financial system.” Drew added that the bank will pursue aspects of the digital economy that has customer benefits.
The bank said in its press release that the technology demonstrated the possibility of cutting transaction time from days to minutes, and will help simplify international banking protocols. Although NAB is the second Australian bank to issue an AUD backed stablecoin, it will go down in history as the first to use it for international payments.
Meanwhile in the U.S, regulators are calling on more stringent measures to regulate stablecoins. Even though there are many USD backed stablecoins, no bank has issued any, neither have they considered using it for cross-border payments.
The U.S has generally been behind in issues of digital currency regulation and application, but this development once again puts the country in second place at best when it comes to the harnessing of digital currency technology.
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