During the Money 20/20 conference held in Las Vegas, Novatti Group, an online payments processing platform, announced that it was planning to issue a new type of utility token called Novatti AUD.
According to the Australian firm, its token will be backed 1-for-1 with the Australian dollar (AUD) and will be introduced on November 19th. The company’s token has reportedly been developed on the Stellar blockchain network.
In addition to being used as a way to quickly liquidate and transfer digital assets between exchanges, the Novatti Group aims to make it easier for users to make remittance payments and pay for everyday items using their stablecoin.
Useful For Remittances, Everyday Purchases
Peter Cook, the managing director at Novatti, told Coindesk:
We think that people will use [the stablecoin] to help purchase goods from Australian enterprises. And we think that will also use them for the payment of bills or for services inside of Australia.
As an Australian government-licensed distributor, the Novatti Group regularly processes large payments, or transactions, for telecommunications firms such as Europe-based Vox Telecom and MoniSend, a remittance service based in South Africa.
While acknowledging that clients may be concerned regarding how to clear know-your-customer (KYC) identity checks, Cook explained:
We will be working with licensed money service businesses, banks and enterprises, who want access to digital assets.
Although Cook did not disclose the names of the companies who would help Novatti offer its new regulated utility token, he did note that:
Novatti is a publicly listed company, it's listed on the Australian stock exchange. So that should give [customers] a lot of trust.
Increased Stablecoin Adoption
As CryptoGlobe reported on October 15th, leading crypto exchange OKEx announced that it would begin listing the following stablecoins: Paxos Standard Token (PAX), Circle’s (USDC), True USD (TUSD), and the Gemini Dollar (GUSD).
On October 16th, Singapore-based exchange Huobi also announced its plans to support PAX, USDC, TUSD, and GUSD. Huobi Global appears to have gone a step further as it now also offers users an easy way to manage their stablecoins.
Huobi introduced the HUSD solution on October 19th - which allows users to make deposits and withdrawals using any stablecoin they prefer. When their stablecoin has been deposited on Huobi’s exchange, the balance is shown in HUSD.
As explained by Huobi: “For example, when you deposit 1 Paxos Standard Token (PAX), it will show as 1 HUSD in your account, and you can withdraw 1 True USD (TUSD).”
Notably, the emergence and seemingly increased adoption of stablecoins has come at a time when there have been increasing concerns among crypto market participants regarding the banking operations of Bitfinex and Tether’s (USDT).
Removing 25% Of USDT From Circulation
As CryptoGlobe reported on October 23rd, 630 million USDT tokens had been shifted during a span of just a few days from a Bitfinex-linked wallet to a cold storage address referred to as “Tether’s treasury.” As a result of this huge transfer, approximately 25 percent of USDT’s market cap was effectively removed from the crypto market.
This raised even more concerns among crypto industry participants regarding Bitfinex’s and Tether’s operations - with some people suggesting that they might be planning an exit from the market.
Notably. the US Commodity Futures and Trading Commission (CFTC) has been monitoring the business operations of both Tether and Bitfinex quite closely for over a year, and the federal regulator had subpoenaed them in December of 2017. As investors begin to lose confidence in USDT, other companies are looking to offer investors more reliable options.
Commenting on Stellar’s role in developing a supportive ecosystem for stablecoins, Lisa Nestor, the director of business partnerships at the non-profit Stellar Development Foundation, said the cryptocurrency platform’s network currently supports around 10 different stablecoins.
IBM And Stronghold's USD Anchor Is "Backed 1-To-1 With USD"
These include the IBM and Stronghold-backed USD Anchor - which is reportedly backed at 1-to-1 with the USD with backup reserves held by Prime Trust, a US state of Nevada-regulated chartered trust firm. The USD Anchor was also developed on the Stellar blockchain.
Explaining the gradual process through which stablecoins come into circulation, Nestor said:
There are network effects here. It took us almost a year to get our first two currency anchors on the network. But then each time we add another one, it makes it easier to add one more.
She added: "I think there was tension in the crypto marketplace, and that drove many of the earlier stablecoins. But we also see continued adoption and growth in the payments space."
Meanwhile, Venezuelan stablecoin supporter, León Markovitz, noted:
In Venezuela, even sending money through the banks gets exchanged at a horrible rate …[so crypto startups can’t] fix a country's economy [overnight, or] on their own.