“Most of the industry uses non-bank and often unregulated USD stablecoins. Now with this AUD stablecoin being issued by the Big 4 banks, the use case is much more compelling,” ZeroCap CEO Ryan McCall said.
ANZ Bank has launched a stablecoin pegged to the Australian dollar, reducing the risk associated with digital asset purchases and encouraging more customers to use crypto.
However, rival bank NAB also has its own stablecoin project expected to launch by the end of the year.
This the first time an Australian bank has issued a digital asset pegged to the value of the Australian dollar, and it may be the first time a major lender anywhere in the world has issued a stablecoin that has been used in an actual transaction.
Faster Transactions with ANZ
ANZ announced that it has handed over the Australian dollar stablecoin, dubbed A$DC, to the Victor Smorgon Group, a private wealth management firm that specializes in digital assets, through digital asset fund manager Zerocap.
Zerocap is a market-leading digital asset investment and technology company operating at the crossroads of crypto and traditional finance, providing products to investors and institutions around the world.
According to a March 24 report from the Australian Financial Review (AFR), the stablecoin will initially launch for institutional clients looking for a profitable on-ramp for crypto investments, though it is likely to open up to the retail market in the future as well.
In the pilot transaction, Victor Smorgon sent $22 million (Aus$30 million) from A$DC to Zerocap, an Australian digital asset fund manager that has partnered with ANZ to provide key infrastructure and advisory services.
The A$DC has already been used in a live transaction, allowing VSG to send $30 million to Zerocap in less than 10 minutes. This transaction usually takes several days.
The company’s decision to mint digital assets pegged to the Australian dollar follows the Reserve Bank of Australia’s announcement in 2021 that the growth of digital wallets could enable the exchange of RBA-backed tokens or digital forms of money, despite continued central bank pessimism about digital currency.
Fireblocks, a global custodian of digital assets, provided the infrastructure, while OpenZepplin audited the smart contracts. Chainalysis has signed on to help with compliance and regulatory obligations.
Optimism and Enthusiasm over A$DC
Speaking to Cointelegraph, Zerocap CEO Ryan McCall highlighted that the ANZ move is not only a “huge step” in mainstreaming crypto for Australia, but also globally, as it provides a legitimate example of a stablecoin backed by a traditional, fully regulated and compliant financial institution. He further claimed that, “Until A$DC, we didn’t have a bank-backed Australian dollar stablecoin, and most of the industry uses non-bank and often unregulated dollar stablecoins. Now, with this AUD stablecoin being issued by the Big 4 banks, the use case is much more compelling.”
Regarding the A$DC pilot, McCall noted that ANZ’s institutional division “was excited and fully committed to this project, to the broader ecosystem, and to delivering an end-to-end service and solution.” He declined to speculate on what might come next from the big bank.
While the transaction took place on Ethereum, he said ANZ would likely take their time weighing their options, as they would also consider Hedera-based distributed ledger technology (DLT).
By Audy Castaneda
