Utility billing and payment services provider Novatti is launching a new Australian dollar (AUD)-backed stablecoin known as the Novatti AUD Utility Token on the Stellar Network.
As the platform’s tokens are tied to Australian dollars, all units in circulation will have an equal, matching reserve of AUD, allowing investors to use the currency freely without having to worry about price fluctuations.
Novatti will hold the coin’s dollar reserves through the company’s licensed subsidiary, Flexewallet Pty Ltd., which is also registered as a remittance network provider with the Australian Transaction Reports and Analysis Centre (AUSTRAC). The service is currently in beta but is scheduled for an official launch on November 19, 2018.
This is the second stablecoin to be tied to AUD, the first being Emparta. The blockchain employment platform recently formed a partnership with Bit Trade, one of Australia’s oldest digital currency exchanges, and announced they would design and launch the stablecoin sometime in 2019.
Bit Trade’s managing director Jonathon Miller commented that the currency will act as a “buffer” against the price swings commonly associated with digital entities like bitcoin and ether.
“Stablecoins solve one of the principal issues that may drive investors seeking steady returns and merchants that currently accept traditional currency away from digital currencies: volatility,” he said. “We believe stablecoins will boost trust, accelerate widespread adoption, and could function as the backbone of blockchain-based financial applications, especially here in Australia given the favorable regulatory environment.”
Stellar and Stablecoins
Per the official press release, “Novatti will be the first AUD anchor on the Stellar Network.” On Stellar’s blockchain, anchors act as token-fiat bridges, allowing the entities that run them to issue tokens in exchange for fiat currencies.
“As an anchor to the Stellar Network, Novatti will accept inbound payments, process withdrawals and transfers, and initiate transactions for any KYC’d consumer or enterprise who seeks to transact via a Novatti user-facing platform or portal.”
Stellar has played host to several different projects of late, including cryptocurrency trading platform Stronghold. Recently, the project launched its own stablecoin known as Stronghold USD via the Stellar Network through a collaboration with IBM Blockchain. Each coin is reportedly worth one U.S. dollar, while units are stored in an account with Nevada-based banking institution Prime Trust.
Co-founder and CTO of Stronghold Sean Bennett explained, “The process for seamlessly managing and trading assets of any form from digital to traditional currencies needs to evolve as financial institutions are seeking ways to break into new asset classes like cryptocurrencies. Asset-backed tokens can provide seamless access to all currencies, improving the global movement of money.”
Stablecoins have grown in popularity in 2018, as several new projects have either been announced or launched in the latter half of the year. Recent additions to the stablecoin community include kUSD, TrueUSD, Gemini USD, the Paxos Standard and USD Coin, a product of Goldman Sachs-funded trading platform Circle and Coinbase.
Nick is a writer, author and journalist that has been covering the cryptocurrency scene since 2014.