National Australia Bank (NAB) says it has executed the first-ever cross-border stablecoin transfer by a major financial institution on a layer 1 public blockchain. The intrabank transfer used the bank’s fully backed AUDN stablecoin, which is tied to the Australian dollar.
The transaction was conducted on the Ethereum blockchain and used smart contracts for seven currencies, according to a statement released on March 14 by the bank. Those currencies were Australian, New Zealand, Singapore and United States dollars, as well as euros, Japanese yen and British pounds, according to a statement released by Fireblocks.
The stablecoins were freshly minted as bank liabilities on the ERC-20 standard. NAB partnered with the Fireblocks platform and BlockFold professional services consultants on the project. NAB executive general manager for markets Drew Bradford commented:
“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 pilot showed the technology’s potential to cut transaction times from days to minutes and was part of NAB’s focus on simplifying international banking protocols, the bank said. It added that it expected to support corporate and institutional clients transacting in digital assets by the end of the year.
NAB is the second major Australian bank to issue an Australian dollar-backed stablecoin. Its AUDN coin was designed with an eye to cross-border transfer and carbon credit trading, according to an announcement made in January. In February, NAB was listed as one of nine founding banks making up the international Carbonplace blockchain carbon credit transaction network.
NAB competitor Australia and New Zealand Banking Group was the first bank to issue an Australian dollar-linked stablecoin, A$DC, in March 2022.