ANZ issues $30m stablecoins pegged to the Australian dollar

TL;DR Breakdown

• Australia and New Zealand Banking Group (ANZ) becomes the first Australian bank to mint stablecoins.
• ANZ teamed up with crypto custodian Fireblocks and they have minted $30 million stablecoins so far.

On Thursday, the Australian and New Zealand Banking Group (ANZ) announced that it had completed an Australian dollar stablecoin payment. ANZ is one of Australia’s major four banks. With this landmark transaction, the bank became the first Australian lender to create a digital asset linked to the country’s currency.

ANZ mints stablecoins

ANZ teamed up with crypto custodian Fireblocks to create the stablecoin. In DeFi‘s history, this is the first time a large bank got involved in producing a stablecoin.

A stablecoin is a type of cryptocurrency designed to maintain its value relative to another asset. They’re frequently utilized as a gateway to other cryptocurrencies or as a source of income in decentralized financial systems.

The Australian bank minted 30 million Australian Dollars stablecoins (A$DC) with an ANZ-developed Ethereum Virtual Machine (EVM) compatible smart contract deployed through the Fireblocks platform.

The bank developed the stablecoin for Victor Smorgon Group, a significant family office based in Australia that will use it to trade on the Zerocap exchange in Melbourne. The move follows the Reserve Bank of Australia’s announcement last year that the growth of digital wallets could allow for the exchange of tokens. Even as the central bank remains skeptical of digital currencies, these digital forms of money could get backed by the RBA.

ANZ Banking Services Portfolio Lead Nigel Dobson stated in a press release, “An ANZ issued Australian dollar stablecoin is a first step in enabling our customers to find a safe and secure gateway to the digital economy.”

He also added, “Stablecoins are a new way for customers to transact and in this case was an efficient and direct way for Victor Smorgon Group to access Zerocap’s digital asset exchange and move funds across a decentralized network.”

Zerocap co-founder and CEO Ryan McCall said, “this is a collaboration that we’re incredibly proud to be a part of.” While adding, “Most of the crypto industry has been focused on directly servicing the retail market, whereas we’ve invested from the outset in establishing the product, technology, compliance, and team to properly service private and institutional clients, like the Victor Smorgon Group and ANZ.” 

Additionally, Fireblocks’ Michael Shaulov predicted that more banks would follow ANZ’s footsteps. Prior to rejoining the cryptocurrency market, Fireblocks collaborated with BNY Mellon, Siam Commercial Bank, Revolut, and Crypto.com as a custodian and infrastructure provider.

Australia embraces decentralized finance

The Australian dollar-denominated alternative stable currency (A$DC) will be available to both retail and institutional investors on an Australian crypto exchange. A$DC transactions are based on the Ethereum blockchain, however, ANZ intends to expand it to Hedera and other chains in the near future.

In late 2021, the Reserve Bank of Australia revealed that it began considering the creation of a digital currency or an eAUD. The Reserve Bank’s retail central bank digital currency (CBDC) would be a digital replica of the Australian dollar.

At the time, RBA governor Philip Lowe stated, “Digital wallets are replacing physical wallets and that this trend is likely to continue. It is also likely that these digital wallets will contain more than just digital representations of the cards that are in our physical wallets.” 

The Treasurer, Josh Frydenberg, also previously revealed that the federal government would launch Australia’s first CBDC before the end of 2022, with a test run expected before the end of the year.