Paper Explores Benefits Of DeFi For FX; Australian Bank Launches Stablecoin — Fin Tech

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A recent indus­try paper found that DeFi can reduce costs and 
enhance trans­paren­cy in for­eign exchange (FX) mar­kets. The paper 
con­cludes that on-chain FX, along with improved fiat-to-stablecoin 
con­ver­sion and improved user-friend­ly inter­faces, enables faster 
and less cost­ly trans­fers. The paper report­ed­ly esti­mat­ed that DeFi 
rails could reduce inter­na­tion­al mon­ey trans­fer costs by up to 80 
per­cent. Accord­ing to the paper, addi­tion­al ben­e­fits of on-chain FX 
exchange and set­tle­ment include (1) elim­i­nat­ing set­tle­ment risk 
when one side of the trans­ac­tion set­tles with­out the oth­er; (2)
reduc­ing risks of bench­mark rig­ging and mar­ket manip­u­la­tion; (3)
facil­i­tat­ing liq­uid­i­ty and mar­ket depth, and reduc­ing risk of flash 
crash­es; and (4) improv­ing pay­ments with near­ly instan­ta­neous and 
low-cost cross-bor­der settlements.

In oth­er news, this week the Nation­al Aus­tralia Bank announced 
that it will launch a sta­ble­coin to be backed by the Australian 
dol­lar on the Ethereum and Algo­rand blockchain net­works. This is 
report­ed­ly the coun­try’s sec­ond major finan­cial insti­tu­tion to 
launch a sta­ble­coin, after Aus­tralia and New Zealand Bank minted 
A$DC last year. The sta­ble­coin is expect­ed to allow cus­tomers to 
set­tle trans­ac­tions in real time on the blockchain using Australian 
dol­lars. Aus­tralia report­ed­ly pledged to “mod­ern­ize the 
coun­try’s finan­cial sys­tem and update its reg­u­la­to­ry framework 
to cryp­to and oth­er inno­va­tions” under Prime Min­is­ter Anthony 
Albanese, and the coun­try’s cen­tral bank is antic­i­pat­ing its 
pilot cen­tral bank dig­i­tal cur­ren­cy (CBDC) project to be completed 
by mid-2023.

For more infor­ma­tion, please refer to the fol­low­ing links:

The con­tent of this arti­cle is intend­ed to pro­vide a general 
guide to the sub­ject mat­ter. Spe­cial­ist advice should be sought 
about your spe­cif­ic circumstances.

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