Slated for launch in the summer, the AUDN will run on the Ethereum and Algorand smart contract blockchain.

The aim is to provide an A$-backed token for customers to settle blockchain transaction in real-time.

Speaking to the Australian Financial Review, NAB’s chief innovation officer Howard Silb, said the AUDN could also be used for "carbon credit trading, overseas money transfers and repurchase agreements".

NAB is following in the footsteps of rival bank ANZ, which in June complete its first transaction for its A$DC stablecoin. For this transaction, Victor Smorgon Group used A$DC as a medium of exchange to purchase the BCAU carbon tokens from Zerocap, an Australian crypto asset investment platform.

Jonathon Miller, Australian MD of crypto exchange Kraken, says the adoption of stablecoins by two of Australia’s big four banks is an explicit recognition of the potential to create significant efficiencies in the financial system, such as instant settlement, atomic swaps, smart contracts and other programmatic use cases.

"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 says.