The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is down after the launch of the first Australian dollar stablecoin.
ANZ’s stablecoin
ANZ announced today that it has successfully executed the first-ever Australian bank-issued Australian dollar stablecoin (called A$DC) payment through a public permissionless blockchain transaction.
What did ANZ do?
ANZ delivered the stablecoin for Victor Smorgon Group via Zerocap, a private wealth management firm for digital assets. These coins were transferred between the parties and later redeemed back into ‘Fiat’ currency.
What is a stablecoin?
ANZ said that a stablecoin is a cryptocurrency with a value linked to a commodity, currency or algorithm to manage supply. ANZ ‘minted’ 30 million of A$DC using an ANZ-built ‘Ethereum Virtual Machine’.
ANZ management commentary
The ANZ Banking Services Lead, Nigel Dobson, said:
An ANZ-issued Australian dollar stablecoin is a first and important step in enabling our customers to find a safe and secure gateway to the digital economy.
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 decentralised network.
We’re excited to continue to trial our capability and explore how this use case can be applied in other industries and customers in the future.
ANZ gets first-mover advantage
The big four ASX bank said that it worked closely with leading providers in the digital asset domain, including Fireblocks.
Fireblocks’ CEO, Michael Shaulov, said:
The financial sector is undergoing rapid transformation and we are enabling institutions with end-to-end technology for plugging into tokenisation, DeFi, staking and crypto trading.
By being the first bank to mint a stablecoin, ANZ has established itself as a leader when it comes to innovation and we look forward to welcoming other institutions who are on the same path.
Final thoughts on ANZ’s move
I am certainly not an expert on cryptocurrency or digital assets. But this move certainly puts ANZ ahead of the pack. I’m sure the other banks will follow suit.
How much will it add to earnings or the ANZ share price? I’m not sure it will add much to profit, but I think it ensures ANZ stays relevant in a world where new payment forms are being created. There is/was a danger that the traditional banks are left behind in an increasingly technological world. This looks a little less likely.
