Weekend Edition: Stablecoin – the Australian opportunity
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What is stablecoin and why is it relevant to Australia?
Stablecoin, we talked about it very recently on the weekend edition, and now we're back with it to give the Australian angle and sell a bit of the sizzle about what this technology can do for us. That's this week. The morning call from NAB with Phil Dobby.
The weekend edition.
Yep, it was a couple of weeks ago when we talked about stablecoin, how backed by a hard currency or safe assets like bonds, how it could drive demand for US treasuries. I think Scott Besson's hope was that it was a way for higher US debt to be funded without increasing borrowing costs, because stable coin will dri drive greater demand for treasuries on a global scale, and that demand will keep yields down. Now I'm not quite sure it works like that or Whether that is the avenue for even greater US debt, but Simon French made the point that unless other countries did the same, the US dollar would become even more dominant than it is now. And he said the Bank of England is missing a trick by not supporting the same thing in the United Kingdom.
Well, the RBA is a little bit more open to the potential of stablecoin and the government is set to release its own legislation. Project A. Caisha. is a recent initiative between the RBA and the Digital Finance Cooperative Research Centre to look at how stable coins and other digital assets can work in a way that's transparent, protects consumers and helps Australia to be competitive globally. Well Drew Bradford, a former NAB man, is now the CEO of Katina Digital, who provides stable coins backed by the Australian dollar. Katina by the way is Italian for chain, which makes sense. He got in touch with us after the Simon French episode two weeks ago, saying there's a lot happening in this space here in Australia which we didn't touch on and they are very much part of it.
So one thing we didn't talk about really was the the uses that could be put to Bitcoin. So I did say that it was used uh to handle transactions uh in and out of other crypto assets. It was an easy way rather than going back to a raw current currency. But uh Drew, could it be more than that? I mean could it be uh used for a wider range of financial transactions and then beyond that, could it be used for business to business transactions in a broader way? Or even consumer transactions. I mean, how far could it go?
Well, it sure it sure can be. There are so many different use cases uh for stable coins and that's why I I guess um while I was at NAB we did explore uh uh NAB issuing uh st a form of stablecoin, a tokenized deposit. We can go into the new nuances of what's the difference between a stablecoin and a tokenized deposit. But for for effectively tokenized money. There are so many different use cases. Uh and one of the uh one of the things that I think i is um i is is the biggest differentiator between a tokenized form of money uh on the blockchain and normal fear is is the smart contract smart contract aspect of stablecoins that you can effectively program them. So you can have an if then statement. If something happens, then you get your payment.
And this is great for protecting people uh in transactions it's great for um uh trade finance if the goods arrive then you get the payment you you know you can have conditional payments on you you know you could uh we if you work these sort of this many hours six hours then the payment if you're a building contractor if you're you you can The uh the builder, the building developer can put uh money into escrow in a smart contract and then when the electricians finish the electrical piece, he can download his payment and then the plasterer. And this protects all the plasterers from the uh from the building developer going broke. But um the building developer doesn't have to pay for the products until they're actually being done and that's all in the smart contract.
There's so many different uh things that uh smart contracts in money.
How is the Australian stablecoin backed and regulated?
Money.
Yeah, I mean I can think of loads of other kinds. I mean deposits for rents, for example, stuff like that could could be any anywhere where you've got to put money aside and it and it needs to be dipped into periodically makes a lot of sense.
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Chapters
8 chapters
1
What is stablecoin and why is it relevant to Australia?
0:01–4:06
2
How is the Australian stablecoin backed and regulated?
4:06–8:07
3
What unique use‑cases do stablecoins enable beyond traditional finance?
8:07–11:19
4
Why are stablecoin transactions cheaper than Visa/MasterCard fees?
11:19–14:48
5
Can stablecoins affect Australian bond yields and macro‑economics?
14:48–18:43
6
Do we need a central‑bank digital currency in addition to stablecoins?
18:43–21:40
7
How could Australian stablecoins support Pacific Island economies?
21:40–24:57
8
What is the projected growth of stablecoins and the role of AI‑driven payments?
24:57–27:58