Stablecoins will become an important part of the payments ecosystem over time. To increase AUDD’s efficiency, we’re integrating protocols into it over 2023 that are used by other anchors on the Stellar blockchain.

Novatti’s AUDD – an Australian dollar (A$) backed stablecoin – has offered users around the world the opportunity to make payments and trade with other Stellar-based digital assets via an on-chain decentralised exchange.

The Stellar Development Foundation (SDF) is a non-profit organisation founded in 2014 to support the development and growth of the open source Stellar network. Stellar is a decentralised, open network that connects global financial infrastructure. Financial institutions worldwide issue assets and settle payments on the Stellar network, which has grown to over seven million accounts since its inception in 2014.
AUDD is a blockchain-agnostic stablecoin so we’ll be adding it to a range of other commercial platforms over time too.

Vital extras

Stellar has additional protocols built on top of the blockchain’s foundation layer, known as Stellar Ecosystem Proposals – or SEPs – that enable businesses to easily integrate payments use cases and services supported on Stellar, such as cross-border payments and on/off ramps.

SEPs essentially allows developers to agree on how services that use the Stellar blockchain should be set up so that various businesses, platforms, services and offerings can work with each other as much as possible – allowing for maximum efficiency and interoperability.

It’s useful to think of SEPs as similar to the rules that govern a sport, like soccer or football. In order for the maximum benefit to be achieved by all players, each individual must follow the rules of engagement in order for the game to be played in an equitable manner.

What is SEP-12?

One of the first Stellar protocols that Novatti will be implementing in 2023 is SEP-12. It is a market-leading initiative that aims to expedite the completion of Know Your Customer (KYC) and Know Your Business (KYB) regulatory requirements that are critical to preventing financial crimes such as identity theft, money laundering, fraud and terrorism financing.

In a nutshell, SEP-12 allows users to complete their ID verification only once via the AUDD platform. That information can be requested by other SEP-12 enabled services the customer chooses to engage – such as a company, money services business or digital currency exchange – in order for that service to meet certain of its compliance obligations.

SEP-12 is similar in concept to the Consumer Data Right that allows Australians to share their data between nominated service providers, except that SEP-12 processes take place on top of the Stellar blockchain.

The benefits SEP-12 brings AUDD will manifest in a number of ways, depending on who you are and how you use it. For example:

• It will allow users to take control of how they share their data with other services, including having more knowledge about what is being shared and, just as importantly, why it’s shared.
• It will allow businesses and merchants to identify their customers more efficiently and to make better business decisions to help determine risks, meet reporting requirements or reduce costs.

Once deployed, we expect that SEP-12 will allow basic KYC/KYB requirements for each transaction to be completed in less than two minutes – though individual circumstances will determine the completion time for more complex transactions.

We are also working towards integrating other SEPs into the Novatti anchor which build on the functionality provided by SEP-12. For example, SEP-24 will allow users to deposit from or withdraw to their chosen payment method in local fiat currencies.

Another protocol, SEP-31, will enable cross border payments such as a currency conversion tool facilitated by anchors on Stellar. Consider, for example, a merchant who deals in USDC but wants to accept orders from Australian customers. The AUDD collected from the customer via SEP-24 could be automatically converted to USDC – the merchant’s native currency – via SEP-31.

Each of Stellar’s unique SEPs are important steps towards establishing stablecoins as a widely accepted form of payment. The AUDD stablecoin has been launched to meet this growing market demand, providing a better customer experience for anyone who makes a payment anywhere, anytime.

Want to know more?

If you already have Stellar integrated with your service and would like to start using AUDD, minimal integration is required to support AUDD. In fact, we are seeking “first mover” partners on the Stellar network, with whom we will fund co-branded marketing campaigns. All you need to do is establish a trustline with our issuing wallet address!