Picture yourself walking into a bank, what can be achieved in 10 minutes? You might make it to the front of the queue before being directed to call up to ask the exact same question the teller couldn’t answer. In that same amount of time, you could have transferred $30 million overseas using blockchain technology and stablecoins. The future of digital payments is here, and it’s being delivered by Aussie fintech company Novatti Group (ASX: NOV) which has launched an AUD-backed stablecoin. 

Named AUDC, every AUDC will be backed 1:1 with Australian dollars which will enable the value of AUDC not to fluctuate when the economy does. Instead, its value is pegged to the Australian dollar while enabling the effective movement of the AUDC across international borders using blockchain technology for traceability, authentication and automation. 

Being logged on the blockchain will create a secure, and permanent, digital record of all transactions and account balances. This will ensure the integrity of each transaction and provides a strong framework to maintain Novatti’s compliance standards, for which they are a service provider of choice utilised by the likes of Marqeta, Afterpay and many of the world’s payment companies. 

“We see digital currencies, such as stablecoins, as the evolution of money and payments as we know it,”  said Novatti Managing Director, Peter Cook. 

“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.”

Although they utilise the same blockchain networks as cryptocurrencies, stablecoins are often wrongly linked to crypto in the sense that the primary purpose of a stablecoin is secured utility. Investors, for example, do not invest in stablecoin because they are so secured that their value simply does not fluctuate because they are backed by an equal amount of fiat currency. Instead, stablecoins facilitate movement across the blockchain because they can be cashed out anywhere in the world for the same corresponding amount in fiat currency such as AUD or USD. 

At present, two of the world’s five biggest digital assets by market cap are stablecoins Tether (USDT) and USD Coin (USDC) which have a combined USD $132 billion in circulation.

Functioning similarly as the aforementioned stablecoins, AUDC will be integrated into Novatti’s existing suite of payment solutions which will enable faster and lower cost domestic, cross-border and billing payments; as well as the option for stablecoin-linked payment cards. 

The value of stablecoins was highlighted last month when the high-profile Smorgans family, billionaires, 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. 

No stranger to blockchain payments technology, Novatti has linked up with long-time partner Stellar as the first adopter of AUDC on their blockchain. In addition to the launch, 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 which has processed more than 2 billion operations made by over 6.5m individual accounts ranging from multinational corporations to startups. 

“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,” added Cook. 

“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.” 

Revenue streams flagged by Novatti for AUDC include conversion, transaction and merchant fees. The digital assets would likely also be used internally with Novatti having a large international presence throughout Asia, Europe and Australia. 

For the quarter ended 31 March 2022, Novatti reported $10.4m in revenue which was a record for the fintech company which will see the Company comfortably eclipse the $16.5m reported across the FY21 full year as they scale their digital payments network with more payment options with lower customer fees. 

Oh, and did we mention that to reach the front of the queue at the bank, you also need to turn up between 9am and 4pm. 

With stablecoins, it’s a matter of any time, anywhere.