Leading Australian digital payments company Novatti has announced that it will be partnering with Ripple to bring its Australian dollar stablecoin, AUDC, to the XRP ledger.
The company had previously announced a partnership with Stellar in May to bring the stablecoin to the Stellar blockchain.
Novatti’s AUDC stablecoin will be dollar-for-dollar backed by real Australian dollars – which seems a wise decision, given the recent chaos surrounding under-collateralised algorithmic stablecoins.
Development to be Largely Funded by Ripple, Stellar
Announcing the Ripple partnership, Novatti CEO and managing director Peter Cook said that much of the cost of developing the AUDC stablecoin will be borne by Ripple and Stellar:
Ripple and Stellar are largely funding the development work and even some of the marketing work that we do to get our stablecoin service out.
Peter Cook, CEO and managing director, Novatti
Cook said grant funding from the two blockchain networks would underpin the project until it started generating sufficient transaction fees to amass revenue on its own.
“For the next year at least, revenues will be from a number of payments from Ripple and Stellar for their grant programs that ameliorate our tech build costs and some of our marketing costs. As we start to monetise later this year, we’ll start to get transaction fees from the stablecoin service as well.”
Novatti Sees Opportunity in Stablecoins
Cook said the creation of AUDC and partnerships with Stellar and Ripple provide Novatti with the opportunity to expand its traditional payments business into the world of digital assets, potentially broadening its market and the use cases for its platform.
“Stablecoins for us is essentially a major foray into digital assets – we are still a payments company, a traditional payments company, but this now gives us a major entree between cryptocurrency, which goes up and down and is subject to other market forces, and real utilitarian crypto-based assets,” Cook said.
“So we build the stablecoin, it becomes part of our ecosystem or our infrastructure, which is licenses, tech, commercial partnerships, and from there we leverage and monetise it for either our financial services customers or end business type customers,” he added.
We will provide services such as stablecoin-as-a-service and also holding and transacting of funds for things such as cross-border payments, on-ramps/off-ramps for cryptocurrencies, and other services yet to be seen.
Peter Cook, CEO and managing director, Novatti
Both Stellar and Ripple have been active recently in partnering with organisations to develop use cases for their tech. In early June, Stellar announced it had partnered with MoneyGram to facilitate stablecoin remittance payments and last November Ripple joined forces with Pacific island nation Palau to develop an eco-friendly digital currency.
