National Australia Bank (NAB) has made history as the first major financial institution to complete an intra-bank cross-border transaction on a public blockchain using its own NAB-issued stablecoin.
NAB conducted the pilot transaction on the Ethereum blockchain and utilised smart contracts for seven major global currencies. The success of this transaction demonstrates the potential to significantly reduce the time and cost of cross-border transactions, benefiting NAB’s corporate and institutional clients who operate in multiple jurisdictions and currencies.
According to Drew Bradford, NAB’s executive general manager of markets, the bank is investing in the development of Australia’s safest, simplest, and most secure digital asset ecosystem.
“We are committed to pursuing the right digital asset opportunities with clear customer benefits,” said Bradford. “We believe that blockchain technology will enable elements of the future of finance, 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 will fully back its Australian stablecoin, AUDN, one-for-one with the Australian dollar and manage it as a liability of the bank, making it the cornerstone for NAB’s ambitions in digital assets. Additionally, it aims to support select clients in transacting with digital assets by the end of 2023.
NAB collaborated with Blockfold and Fireblocks to build and deploy its stablecoins on the Ethereum blockchain. This involved utilising their expertise in smart contract creation, secure minting and burning of stablecoin, and managing custody of digital assets on the blockchain.
Michael Shaulov, CEO and co-founder, said: “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”.
While BlockFold CEO and co-founder Francois Schonken, added: “NAB’s multi-currency cross border settlement execution on a public blockchain is exhilarating. The NAB eco-system of stablecoins puts in place cross-border payment rails that unlock tokenisation potential for both real world assets and financial products”.
NAB’s ambition is to enable transactions across seven of the top globally utilised currencies: Australian, New Zealand, Singapore and US dollars, Euro, Yen and Pound Sterling.