Following the announcement of their stablecoin for instantaneous cross-border digital payments, fintech company Novatti Group (ASX: NOV) has confirmed that its AUDC coin will be integrated into one of the world’s biggest blockchain networks when it is issued on Ripple’s XRP Ledger.
While Ripple may be best known for their XRP cryptocurrency, their underlying payments network is utilised by more than 300 global financial institutions, including Novatti.
AUDC is Novatti’s latest innovation as part of the suite of digital payment products that will be integrated into their international payments network. With confirmation that Ripple will issue AUDC on the XRP Ledger, they join Stellar as major blockchain payment companies that will offer AUDC on their respective networks.
“Novatti is in the business of finding innovative ways for our clients to pay and be paid. Following on from the success of utilising the digital asset XRP for cross-border payments from Australia to the Philippines last year, we once again looked to the XRP Ledger to issue Novatti’s new stablecoin, AUDC. This really highlights the value of our global payments ecosystem, which can be readily replicated and expanded to capture new and innovative opportunities to best serve our clients,” said Novatti Managing Director Peter Cook.
“We strongly believe that demand for the use of digital currencies will only increase going forward. Deploying our AUDC stablecoin on the XRP Ledger will help Novatti capture this growing demand and, in turn, position us to deliver new revenue streams.”
Like other popular stablecoins, AUDC will be 1:1 pegged against fiat currency. Institutions and individuals will be able to purchase 1 AUDC for 1 AUD and then leverage its utility by sending the AUDC to a digital wallet through a blockchain network without international transaction fees, and instantaneously. On the other end of the transaction, the receiver can then keep the AUDC or cash it out as AUD.
As the issuers of AUDC, Novatti will generate revenue from the product through conversion, transaction and merchant fees, where it will also be integrated into its existing global payment services network.
The value of stablecoins was highlighted in April 2022 when the high-profile billionaire Smorgon family utilised stablecoins to transfer $30 million within 10 minutes which could be withdrawn as $30 million. The same process would have taken traditional banking systems several days to execute and incurred foreign exchange fees which stablecoin transfers are immune to.
Where the use of stablecoins may be of biggest value to Novatti’s broader business is the fact they hold merchants acquiring licences with both Visa and Mastercard. This enables Novatti to partner with merchants to accept digital payment in fiat but once those payments are received, they can effectively be moved anywhere in the world via the AUDC stablecoin. The value of this utility is still largely untapped but would be particularly appealing to multinational corporations that spend millions of dollars in banking, foreign exchange and international transfer fees.
Securing the partnership to issue AUDC on the XRP Ledger continues an impressive run of wins for Novatti which is set to receive a dividend around $8 million as the major shareholder of accounting software company Reckon which sold a subsidiary business for $100m. Making the sale most impressive for Novatti was that Reckon’s accounting software division remained unchanged where they will offer Novatti’s merchant payment services to Reckon’s 114,000 cloud-based users.