carbon credits

Aussie ‘Big 4’ bank mints stablecoin for carbon trading and remittances

This marks the second “Big Four” bank in Australia to launch an Australian-dollar pegged stablecoin in a bid to boost the digital economy.

National Australia Bank (NAB) is set to become the second “Big 4” Australian bank to launch an Australian dollar-pegged stablecoin on the Ethereum network.

Set to launch sometime in mid-2023, the AUDN stablecoin is aimed at streamlining cross-border remittances and carbon credit trading, according to a Jan. 18 report from the Australian Financial Review (AFR).

NAB chief innovation officer Howard Silby said the decision to mint the AUDN stablecoin — which is backed 1:1 by the Australian dollar (AUD) — was based on the bank’s belief that blockchain infrastructure will play a key role in the next evolution of finance:

“We certainly believe there are elements of blockchain technology that will form part of the future of finance […] From our point of view, we see [blockchain] has the potential to deliver instantaneous, transparent, inclusive, financial outcomes.”

The implementation of AUDN for real-time, cross-border remittances could become a way for customers to sidestep the slower and more costly SWIFT payment network.

Carbon credit trading and other forms of tokenzied real-world assets will also be a major use case for the AUDN, Silby said. He also added that they’re planning to offer stablecoins in “multiple currencies” where the bank has licenses.

NAB’s announcement of the AUDN comes nine months after rival Australia and New Zealand Banking Group (ANZ) launched 30 million tokens of its own stablecoin tickered A$DC in March, which is also used for international remittances and carbon trading.

Prior to ANZ and NAB’s stablecoin projects, the two banks planned on teaming up with the other two “Big Four” Australian banks — Commonwealth Bank of Australia and Westpac — to co-launch a nationwide stablecoin backed by the AUD.

However, it failed due to competition concerns and the banks being at different stages in their adoption and strategy, the AFR explained.

*NAB, one of the “Big Four” banks in Australia, is set to roll out its own stablecoin in mid-2023. Source:* *PYMNTS*

Jonathon Miller, managing director of crypto exchange Kraken Australia, told Cointelegraph that banks are beginning to acknowledge the technical advantages that blockchain infrastructure offers over traditional legacy systems:

“The persistent adoption of crypto technology by financial institutions like ANZ and now NAB for its potential to create significant efficiencies in the financial system […] is an explicit recognition of the competitive advantage over traditional payment systems.”

“We expect this trend to continue, inevitably evolving to include the adoption of various other cryptocurrencies and tokens for increasing use cases in the Australian economy,” he added.

It also remains to be seen how these private bank-issued stablecoins would work in tandem with the Reserve Bank of Australia’s eAUD — a central bank digital currency (CBDC) that is currently in its pilot phase.

However, NAB is confident the two will be able to operate simultaneously and have their own set of unique use cases.

Putting carbon credits on blockchain won’t solve the problem alone: Davos

Cointelegraph’s editor-in-chief Kristina Lucrezia Cornèr moderated a panel discussion in Davos, Switzerland, about pricing carbon credits.

Simply trading carbon credits on the blockchain won’t solve much for the environment. Carbon blockchain executives argue that companies must understand why they’re using them and how to make a real impact.

During a panel session in Davos, Switzerland, moderated by Cointelegraph’s editor-in-chief, Kristina Lucrezia Cornèr on Jan. 16, several executives from carbon blockchain platforms spoke about the increasing interest from companies in carbon trading.

Karen Zapata, the chief operating officer of carbon blockchain platform ClimateTrade, said that sustainability had been a “trending topic” with many companies keen to get involved, but noted that many still don’t understand it.

She recalled talking to a sustainability manager of a “big, big company” who told her he doesn’t know what a carbon credit is or “how it works”, but is being pressured by his marketing team to “move this forward.”

Zapata emphasized that companies won’t be able to communicate what they are doing with carbon credits to their community if they don’t “even understand” what it is.

She added that one should be less concerned about the pricing behind carbon credits and more about the impact. She explained that the price comes second once the positive impact is understood.

Carbon marketplace Tolam Earth CEO Matthew Porter added to the conversation by saying that carbon trading alone “doesn’t solve a lot,” without knowing why they are doing it and creating “incentives and drivers.”

He also added that putting it on the chain only solves a “little bit” of inefficiency.

There has been no shortage of carbon credit developments in the blockchain space in recent times.

Blockchain-based storage network Filecoin launched Filecoin Green, a protocol labs initiative designed to reduce the environmental impact of its native cryptocurrency, Filecoin, in October 2022.

The first project it launched was CO2.Storage — a Web3 data storage solution that aims to provide transparency for carbon offsets and address traditional storage solutions for all digital environmental assets, including renewable energy credits.

WeWork CEO Adam Neumann dived into the carbon crypto space in May 2022, raising $70 million in the first major funding round for his climate tech venture Flowcarbon.

The project was created to make carbon trading more accessible by putting carbon credits on the blockchain.