AUDD to adopt new protocol offering faster deposits and withdrawals
09 Mar, 2023
AUDD users will soon be able to deposit and withdraw fiat currencies via a number of payment methods – such as bank accounts or credit cards – without leaving the Stellar blockchain.
This market-leading functionality will be made possible through the integration of Stellar’s interoperability protocols into the Novatti anchor and will help AUDD achieve its objective of becoming a widely-used stablecoin for payments, transactions and remittances.
The Stellar Development Foundation is a non-profit organisation that supports the growth and development of the decentralised, fast, scalable and uniquely sustainable Stellar network. The Stellar network is both a cross-currency transaction system and a platform for digital asset issuance, designed to connect the world’s financial infrastructure.
Since AUDD’s launch on 1 November 2022, Novatti has joined a global network of anchor organisations that connect the Stellar network to the traditional banking system and help anchor Stellar technology in the real world.
AUDD is Novatti’s Australian Dollar (A$) backed stablecoin and part of the company’s vision to enable entities to pay and be paid seamlessly anywhere in the world.
Over time, the Stellar ecosystem has designed and introduced a suite of Stellar Ecosystem Proposals (“SEPS”) that define the standards, protocols, and methods utilised by the ecosystem built on top of the Stellar network. These SEPs allow important elements of transactions to be fulfilled quicker on Stellar without compromising governance standards. Novatti anticipates that three SEPs will be incorporated into AUDD in 2023.
What is SEP-24?
The second SEP integrated with AUDD – SEP-24 – is a standardised on-and off-ramp API that will enable Novatti to collect KYC information directly from the customer through a user interface opened by the user’s preferred wallet application.
SEP-24 will allow AUDD users to deposit and withdraw Australian dollars to or from any participating platform or service by using AUDD as the intermediary digital currency between themselves and the other party. What makes SEP-24 powerful is that it makes organisations offering on and off-ramping services, such as Novatti, immediately compatible with all the existing applications on Stellar that already support SEP-24. What this means is that wallet applications don’t need to build an integration with each of the different exchanges. Instead, the wallet application merely builds one integration compliant with the SEP-24 standard and can proceed to connect to all SEP-24-enabled anchors, including Novatti. So when Novatti launches, users can immediately reach out to these applications and begin using Novatti’s products and services, including AUDD, with minimal development effort.
Ordinarily, users would need to open a number of accounts to achieve the same outcome. For example, a customer who wanted to purchase USDC on the Stellar decentralised exchange would first sign up for an AUDD Digital account. This would include completing the KYC process, funding the account with fiat AUD, and then placing an order to buy AUDD. They would then send their AUDD to a service or platform that interacts with the Stellar decentralised exchange – such as LOBSTR – to trade their AUDD for USDC. Each platform would require the user to complete various account registration tasks, making it a time-consuming process.
SEP-24 overcomes the need for these steps by allowing users to register and onboard once as long as SEP-24 is integrated into the application or wallet the AUDD user wishes to access.
In the example above, the customer could complete the onboarding, funding, and purchasing of AUDD process via their preferred wallet application and AUDD would be credited straight to their wallet for use.
Additionally, if the customer decided they no longer wanted to use that particular wallet application – and preferred another SEP-24 enabled wallet application – they could interact with the SEP-24 integration deployed within the new app, but wouldn’t need to verify again, as they had already done so when interacting with AUDD’s SEP-24 previously.
This would eliminate the number of times that a user shares sensitive financial information and reduces the risk of their personal data being compromised.
The adoption of SEP-24 and other SEPs by a range of providers on Stellar is an important step towards the goal of making stablecoins like AUDD a widely-accepted form of payment that can be used on a daily basis.
Why it matters
SEP-24 will allow Australian users to access the benefits of the blockchain economy by connecting them to suppliers of products and services at a competitive cost. On the flip side, it will allow businesses to gain near-instant access to the Australian market without the need for extensive investment in technology or business development.
For example, a digital asset that uses SEP-24 can provide a stepping stone for a user to access deeper liquidity at a more competitive rate in a cryptocurrency or FX market. or A business that integrates SEP-24 into its payment channels can then use additional SEPs to connect AUDD to other assets in a background process known as ‘asset bootstrapping’. In such an instance, the business will not need to create an AUDD market but instead channel volume and liquidity into a singular, existing AUDD market.
What’s next for AUDD?
AUDD is a blockchain-agnostic stablecoin that will be added to other commercial platforms over time.
To find out more about AUDD and how it can be used on the Stellar network, please contact us.
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