....why is a converter needed?
I am just assuming that the OP can't easily run a new optical audio cable, or that it is difficult to do so based upon their earlier response that they have certain cables in place already and would go so far as to use analog audio connections. So, with coaxial cables (RCA) in place, they can use the optical audio output, use a converter to get it to coaxial, then just plug the RCA into the digital coax connection, and plug into a digital coax. RCA connection on the NAD for proper digital surround sound.
That may be easier than running the currently non-existent digital optical audio cable.
But, yes, if easy enough to put in place a digital optical audio cable, then that is the preferred option.