Last week it was reported that the National Australia Bank (NAB), one of the country’s big four banks, has issued an AUDN stablecoin, which is not yet widely available. A few days later, the NAB confirmed a partnership with agtech startup Geora to use blockchain to record sustainable farming practices. The two initiatives are likely to overlap.

As a background to the agricultural association, NAB has an ‘Agri Green Loan’ book, and the blockchain solution is being used to track borrowers’ compliance with green loan covenants.

“With our stablecoin functionality, which can be characterized as a tokenized deposit, in addition to our use of blockchain to verify our green assets, a tokenized green deposit offering is certainly in the vein of NAB’s digital asset product development.” said Howard Silby, NAB’s chief innovation officer.

NAB sees a role for itself as a go-between for investors looking to use their money for sustainable solutions, whether it be parking their money in time deposits or bonds. On the other hand, borrowers are embracing greener business models, such as the Leather Cattle Company, which is a NAB client.

Geora’s private Ethereum blockchain is used to track green credentials. In addition to using a distributed ledger for food traceability, the blockchain startup envisions a future where tokenized agricultural products, agricultural assets, are used as loan collateral.

The use of blockchain helps to standardize reporting across different loans, with the potential to create a portfolio of green bonds.

Going back to the original purpose of the NAB stablecoin, the use cases are for cross-border remittances, carbon credit trading, and a form of short-term financing in the bond markets, which we assume is the reference to ‘repo’.

The stablecoin plan

We were curious about the green aspect of the stablecoin and received the following response via email.

“We believe the building blocks of the future of finance will be blockchain-enabled because it has the potential to help deliver instant, transparent, and inclusive financial results for clients as our economy becomes increasingly digitized,” Silby wrote.

“As a trusted financial institution, we have an important role to play in advancing the maturity of the blockchain-enabled sector. Our focus is heavily on looking at use cases where there is high friction and clear customer benefit, especially for the larger businesses in our corporate and institutional banking customer base.”

“This could be to help offer instant settlement for corporate clients doing cross-border remittance activities, or it could be to help with things like carbon credit trading activities that we know many of our clients are increasingly interested in.” in performing”.

“We created our stablecoin on the Ethereum blockchain in December. It is not yet available for more widespread use. We will shortly begin testing our stablecoin with internal transactions before looking to expand use cases by working closely with the needs of our corporate clients.”