Big 4 ANZ Bank has become the first Australian bank to mint an Australian dollar (AUD) pegged stablecoin named “A$DC”.
But rival bank NAB also has its own stablecoin project which is expected to launch by the end of the year.
ANZ is working with local regulators such as AUSTRAC and APRA to get the project approved in a compliant manner, and has already conducted a test transaction on the Ethereum blockchain with its institutional partner Victor Smorgon Group, the family office linked to the billionaire Smorgon family. .
According to a March 24 report from the Australian Financial Review (AFR), the stablecoin will initially be rolled out to institutional clients looking for a profitable on-ramp for crypto investments, but it is likely to be open to trading. retail market. also in the near future.
The pilot transaction saw Victor Smorgon send $22m (Aus$30m) from A$DC to Zerocap, an Australian digital asset fund manager that has partnered with ANZ to provide key infrastructure and consulting services.
Fireblocks, a global digital asset repository, provided the infrastructure, while OpenZepplin audited the smart contracts. Chainalysis signed on to help with compliance and regulatory obligations.
Speaking to Cointelegraph, Zerocap CEO Ryan McCall pointed out that ANZ’s move is not just a “huge step” in mainstreaming crypto for Australia, but also globally. global, as it provides a legitimate example of a stablecoin backed by a fully regulated, compliant, and mainstream financial institution:
“Until A$DC, we didn’t have a bank-backed Australian dollar stablecoin, and most of the industry uses non-bank and often unregulated USD stablecoins. Now with this AUD stablecoin issued by the Big 4 bank, the use case is much more compelling.
Regarding the A$DC pilot test, McCall noted that ANZ’s Institutional Division “was enthusiastic and fully committed to this project, the ecosystem at large, and providing an end-to-end solution and service.” . He declined to speculate on what might come next from the big bank.
Although the transaction was made on Ethereum, he said ANZ would likely take its time weighing its options, with Hedera Distributed Ledger Technology (DLT) also being considered.
“The transition to ETH2 and beyond will be significant. It’s not a sure thing for Ethereum, as Hedera and others are in the mix here, including from an ANZ perspective,” he said.
McCall said it’s “inevitable” that the Big 4 banks will seek to become the leading direct on-ramps to crypto in the near future.
Nigel Dobson, ANZ Banking Portfolio Manager, said a digital Australian dollar provided by a bank will accelerate the local digital asset economy.
“Our clients want to buy digital assets and see a digital Australian dollar hit by a big ADI [authorized deposit-taking institution] as ANZ will reassure them that they can transact with us and use the coin domestically. This means they don’t have to trade coins in US dollars, taking on the currency risk in a lengthy process.
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ANZ isn’t the only local bank working on a stablecoin launch of late, after NAB’s Director of Innovation and Partnerships Howard Silby pointed out at the Australian Blockchain Week event that ” banks are starting to have a mainstream blockchain moment.”
Silby said NAB was working on a stablecoin to settle transactions on its carbon credit platform based on distributed ledger technology (DLT) “Carbonplace”, which is expected to launch in late 2022.
“The stablecoin component to make sure both sides of the transaction can all be on-chain is super important and another exciting development we’re working on right now,” he said, adding that:
“We made exchanges, but we had to settle partly in fiat. So the big breakthrough will come later this year when we have a stablecoin and we can actually do everything on-chain.