ANZ Bank has developed a stablecoin pegged to the Australian dollar, reducing the risk associated with digital asset transactions and encouraging more customers to utilise cryptocurrency.
This is the first time an Australian bank has issued a digital asset connected to the value of the Australian dollar, and maybe the first time a major institution anywhere in the world has issued a stablecoin that has been used in a genuine transaction.
ANZ said that it has transferred the Australian dollar stablecoin, nicknamed A$DC, to Victor Smorgon Group, a private wealth management business focused on digital assets, through digital asset fund manager Zerocap.
The A$DC had already been utilised in a live transaction, allowing VSG to transmit $30 million to Zerocap in less than ten minutes. Typically, this transaction would take many days.
Zerocap is a market-leading digital asset investment and technology company that operates at the intersection of crypto and conventional finance, delivering solutions to individuals and institutions globally.
The company’s decision to mint digital assets backed by the Australian dollar comes on the heels of the Reserve Bank of Australia’s announcement in 2021 that the growth of digital wallets could enable the exchange of tokens or digital forms of money backed by the RBA, despite the central bank’s continued pessimism toward digital currency.
Stablecoins are cryptocurrencies whose value is tied to a certain commodity, currency, or supply management mechanism.
ANZ released 30 million A$DC through the Fireblocks platform, using an Ethereum Virtual Machine (EVM) compliant smart contract designed by ANZ. The parties traded these coins and ultimately converted them to fiat currency.
Nigel Dobson, ANZ Banking Services’ chief executive officer, stated: “An Australian dollar stablecoin issued by ANZ is a key first step in enabling our customers to participate in the digital economy safely and securely.”
ANZ worked with leading digital asset providers such as Chainalysis, Fireblocks, and OpenZeppelin to design its own stablecoin smart contract.
Significant Transformation
Fireblocks’ CEO, Michael Shaulov, explained: “The financial industry is experiencing profound change, and we are allowing institutions to use tokenisation, DeFi, staking, and crypto trading through end-to-end technology.”
Other large financial institutions are expected to follow suit and launch their own stablecoins or other cryptocurrencies.
ANZ has a long record of effectively deploying blockchain solutions and is a founding partner of Lygon, a firm that leverages blockchain technology to speed the process of obtaining bank guarantees.
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