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National Australia Bank (NAB) plans to launch an Australian dollar-pegged stablecoin on the Ethereum network in mid-2023.

The move would make National Australia Bank the country’s second ‘Big 4’ bank to launch such a coin, after rival bank ANZ minted 30 million tokens of its A$DC stablecoin in March 2022.

Much like ANZ’s coin, NAB plans to use its AUDN stablecoin to streamline cross-border payments and support carbon credit trading, according to a report from the Australian Financial Review (AFR).

NAB chief innovation officer Howard Silby said the decision to mint a 1:1 Australian dollar (AUD) backed stablecoin stems from the bank’s belief that blockchain infrastructure will play a key role in the future of finance.

“We certainly believe there are elements of blockchain technology that will form part of the future of finance,” he said.

“[Blockchain] has the potential to deliver instantaneous, transparent, inclusive, financial outcomes.”

Using a stablecoin like AUDN for real-time, cross-border payments has its benefits over the slower and less cost-effective SWIFT payment network.

The bank also believes carbon credit trading and the tokenisation of real-world assets will be a key use case for the AUDN.

Silby said NAB plans to offer stablecoins in “multiple currencies” where the bank has licenses.

Before ANZ launched its own stablecoin last year, Australia’s Big Four had planned on co-launching a national stablecoin backed by the AUD.

The AFR has said that it failed due to the banks being at different stages in terms of strategy and adoption however, as well as wider concerns about competition.

Little has been said on how both of these banks’ private stablecoins will work in cohesion with the Reserve Bank of Australia’s Eaud, a central bank digital currency (CBDC) in its pilot stage.

With crypto adoption in Australia set to grow considerably in 2023, the country’s financial sector has become increasingly keen on blockchain adoption in recent months.