The Australian and New Zealand Banking Group, ANZ, announced that it has minted an Australian dollar (AUD) pegged stablecoin A$DC, making it the first Australian lender to issue a digital asset tied to the country’s currency.
In Brief:
- The first transaction using the stablecoin happened between Victor Smorgon Group and Zerocap.
- The stablecoin infrastructure was provided by Fireblocks, smart contracts were audited by OpenZeppelin.
- A$DC will be programmable allowing it to interface with Ethereum smart contracts.
According to the Australian Financial Review’s report, the trial transaction allowed Melbourne’s billionaire Smorgon family’s investment company, Victor Smorgon Group, to transmit 30M AUD worth A$DC to a digital asset fund manager, Zerocap, in less than 10 minutes.
Victor Smorgon Group will now be able to use ANZ’s coin to buy crypto assets, like Bitcoin or Ethereum directly at a lower cost. This may be the first time a bank has created a stablecoin that has been used in a real transaction.
Victor Smorgon’s transaction took place on the Ethereum network. Transaction costs are expected to decrease upon the launch of ETH 2.0, according to ANZ. It’s also getting ready for A$DC to work on other blockchains, such as Hedera.
The infrastructure was provided by Fireblocks, a worldwide digital asset custodian, and the smart contracts were audited by OpenZeppelin. Chainalysis has agreed to help with regulatory and compliance duties.
The demand for ANZ’s Australian dollar stablecoin is expected to be strong. ANZ banking services lead Nigel Dobson stated, “We anticipate the digital asset economy will accelerate and a foundational element will be a digital Aussie dollar.”
ANZ’s A$DC will first be targeted towards institutional clients. The bank expects it to be listed on an Australian licensed crypto exchange in the future to help with digital asset transactions in retail markets.
ANZ is currently working with its regulators, such as APRA and AUSTRAC, to ensure that they are familiar with the product. The A$DC will be entirely backed by Australian dollar currency kept in a Trust, according to ANZ.
According to ANZ, A$DC will be programmable, allowing it to interface with Ethereum smart contracts and, in turn, help support the atomic settlement of mortgages, which allows payments and title exchange to happen concurrently.
The company’s decision to mint digital assets tied to the Australian dollar follows the Reserve Bank of Australia’s announcement that it is monitoring developments as it considers creating a CBDC for the wholesale market.
“We can modify our coin for our customer needs, whereas CBDC is likely to be more generic and focused on person-person payments. We have a strong thesis this is the first digital asset we will be dealing with, and it will enable transactions across a range of other digital assets, be that tokenised securities or tokenised physical assets,” Bodison added.
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