YDNEY, AUSTRALIA: Novatti Group Limited (ASX:NOV), a leading fintech enabling businesses to pay and be paid, will launch an Australian Dollar (AUD) backed stablecoin leveraging the open source Stellar blockchain.
The stablecoin, to be called AUDC, will provide a digital representation of the Australian dollar, and will be secured with a 1:1 backing of AUD fiat value. This provides a distinction to purecryptocurrencies, which do not correlate or link to any particular market economy, commodity, or asset.
This technology will also create a secure, and permanent, digital record of all transactions and account balances, which maintains the integrity of each transaction and provides a strong framework to maintain Novatti’s absolute focus on compliance.
While still a relatively new innovation, the demand for stablecoins is growing rapidly. In the 12 months to September 2021, the amount of USD-pegged stablecoins circulating on public blockchains increased by more than 500% to nearly US$130b.1 Even the Governor of the Reserve Bank of Australia, Dr Philip Lowe, has noted that in future we could see payments made “by moving tokens around rather than moving banknotes”.
Novatti believes that this is the direction that payments are heading, with growth in the demand for stablecoins only expected to accelerate. By launching an Australian Dollar backed stablecoin on Stellar, a network designed for stablecoins and renowned for its speed, low-cost, and interoperability, new opportunities to power more seamless and near-instant financial services emerge both domestically and across borders.
AUDC will be integrated into Novatti’s existing suite of payment solutions, providing clients with even more choice in how they choose to pay and be paid, while creating new business use cases with potential for: faster and lower cost domestic, cross-border and billing payments; as well as the option for stablecoin-linked payment cards.
In doing so, it will create new potential revenue streams for Novatti, including conversion, transaction and merchant fees, subject to product demand.
The potential benefits of using stablecoins for payments were highlighted in a recent transaction that made headlines involving the Smorgons, a prominent Australian billionaire family. Here, stablecoins were used to transfer $30m within 10 minutes, compared to what would have taken several days using existing systems, while also avoiding foreign exchange fees.
Importantly, the Stellar Development Foundation has committed to supporting the development of Novatti’s stablecoin in a staged approach, resulting in minimal capital contribution from Novatti.
Launched in 2014, Stellar is an open-source, decentralised network for currencies and payments. Since launching, it has processed more than two billion operations made by over 6.5m individual accounts.4 Large enterprise companies through to startups have chosen Stellar to move money and access new markets.
The design of Novatti’s stablecoin also lends itself to being leveraged by additional blockchain networks in time.
Novatti’s Managing Director, Peter Cook, said: “Enabling business to pay and be paid, from any device, anywhere, is core to Novatti’s vision. Launching our own stablecoin will further this.”
“We see digital currencies, such as stablecoins, as the evolution of money and payments as we know it. If you look back in history, we traded in silver and gold, then paper and now plastic banknotes. Novatti’s stablecoin is part of the next leap in payments innovation, creating a purely digital representation of physical currency.”
“We believe the demand for the use of digital currencies will only rapidly increase going forward, so launching this new stablecoin is timely, placing Novatti ahead of the curve. At the same time, we are incredibly excited to be launching on the Stellar network.”
“Through this new product, we will be able to provide our clients with a faster, lower cost and more flexible option to pay and be paid, while opening up potential new revenue streams for Novatti.”
www.novatti.com
