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Australia’s Digital Finance Opportunity: The Case for AUD-Backed Stablecoins
Australia boasts the technological capabilities, skilled workforce, and regional influence necessary to make significant strides in digital finance. Despite being the largest economy in Oceania—with a GDP exceeding AUD 2.7 trillion (USD 1.8 trillion)—the nation currently lags in the development and deployment of Australian dollar-backed stablecoins.
Over the past year, global stablecoin transaction volumes have surged past USD 35 trillion, yet Australian dollar transactions represent a mere fraction, accounting for less than 0.01% of this total. This statistical reality signals not just a missed opportunity for Australian fintech companies and exporters, but also serves as a critical wake-up call for the country.
The Launch of AUDD: A Transformative Step
A recent survey revealed that 31% of Australians either own or have owned cryptocurrency, highlighting a growing acceptance of digital assets. The stablecoin market’s rapid expansion—growing from USD 27 billion in early 2021 to an anticipated USD 257 billion by mid-2025—indicates significant potential within Australia’s tech-savvy population of 26 million.
The introduction of the AUDD stablecoin on the Hedera public blockchain marked a crucial move for Australia to enter the digital finance arena. Launched in November 2022, AUDD is also compatible with major blockchains such as Ethereum, Solana, XRP Ledger, Stellar, and XDC, showcasing its cross-chain capabilities.
While competitors like the National Australia Bank’s AUDN project faltered due to "low demand," and the Australia and New Zealand Banking Group’s A$DC remained in pilot mode, AUDD emerged as a fully regulated stablecoin created by Novatti, a listed Australian firm. Novatti aims to develop a practical payments infrastructure for various stakeholders, including local businesses, exporters, and government entities.
From Concept to Reality: The Rise of Practical Payments
Stablecoins are evolving from being simple tools to hedge against cryptocurrency volatility into essential payment solutions. Investors today seek programmable money that can facilitate real-world transactions, as the smart-contract functionalities of advanced blockchains allow for seamless payment automation.
Imagine automated invoice settlements triggered by shipment departures or milestone-based payments. These advancements could revolutionise cash flow management in Australia, allowing businesses to bypass lengthy waits for settlement and high transaction fees. Some leading blockchains can confirm transactions in under two minutes; for example, Ethereum processes transactions on average between 15 seconds and two minutes.
With the implementation of AUDD, the pivotal question is no longer if stablecoins will succeed in Australia, but rather when they will become ubiquitous.
Emphasising Collaboration Over Competition
The struggles faced by previous AUD-pegged stablecoins can often be attributed to overly cautious compliance approaches or a focus on exclusive partnerships with institutional players, thereby neglecting broader market needs.
The current landscape does not need a confrontation between established financial institutions and emerging fintech companies; rather, a collaborative framework is needed. Local fintechs pursuing independent paths may find it challenging, while a hands-off approach from regulators could hinder Australia’s competitiveness on the global stage.
The introduction of AUDD on Hedera signifies a key moment that could transform how Australian dollar payments function. Integrating stablecoins into invoicing for exporters or embedding programmable AUD into international payment systems will showcase the significant advantages of modernised financial infrastructure.
This is not the moment for Australia to continue depending on outdated banking systems. Instead, it should establish robust frameworks, conduct pilot projects, and enable the Australian dollar to confidently step into the digital age.
This article represents the author’s personal views and should be interpreted as such.
