Case Study

Bringing An Australian Dollar Backed Digital Asset To Global Finance

Industry

Fintech

Location

Austrailia

Use cases

Stellar for Asset Tokenization

Stablecoins

DEX

Liquidity

About

This is AUDC

AUDC Pty Ltd, (a Novatti Group company) is an innovative fintech company utilizing blockchain technology to revolutionize money. As the issuer of AUDD, an Australian dollar-backed stablecoin, it brings decades of experience offering digital money solutions

AUDD represents a significant leap forward in solving the liquidity challenges faced by financial institutions, offering instant, low-cost cross-border payments. By leveraging the Stellar network, we're creating a more efficient, secure, and accessible financial system for businesses globally.

Michaela Juric, GM Partnerships and Commercial, AUDC Pty Ltd

Challenges

Financial institutions sending global cross-border payments face the ‘liquidity problem.’ This issue arises when institutions make a global transfer – the payment must arrive at its final beneficiary before the exchange can settle. To expedite the process of settling transactions organizations require a lot of liquidity to prefund the payment. This is inefficient as pre-funding takes time in the traditional financial system and goods may not be released until the payment is fulfilled.

Solution

AUDC recognized that attributes like speed, low cost, and interoperability, make blockchain the ideal infrastructure to help solve this problem. After selecting the Stellar network, AUDC issued AUDD, a fiat-collateralized Australian stablecoin called AUDD issued on the Stellar network.

Further, AUDC leverages the Stellar Decentralized Exchange (DEX) to enable institutions to mint AUDD on demand to meet liquidity needs, as they arise. By default, minting AUDD tokens is a multi-signature process that protects an infinite amount of AUDD from being minted by a bad actor. However, this process makes pre-minting AUDD inefficient if an organization requires access to additional AUDD and a signatory party is not available to support the transaction.

To resolve this, AUDC created AUDR, an asset that enables institutions to pre-mint AUDC’s AUD-backed asset through the Stellar DEX. In practice, when an institution wants to mint AUDD on demand, the system will release AUDR and then use the Stellar DEX to swap AUDR into AUDD. The swap then generates AUDD on demand without requiring the multi-signature step.

By tokenizing this asset on the Stellar network, AUDC is able to offer fintechs and money service businesses:

Global Accessibility - The broad global ecosystem on Stellar has enabled AUDC to distribute AUDD to a global set of on and off-ramps and wallets building on the network including Banxa.
Transact between digital and fiat currencies - The Stellar network hosts a variety of global stablecoins, meaning institutions can leverage AUDD to make payments and convert AUDD into another digital asset before it reaches its end destination.
Safe and secure payments - Transactions on the Stellar network are immutable meaning institutions can easily review and audit payments and exchanges made between institutions and organizations.
Lower transaction fees - The relatively low cost of transfers on the Stellar network make it economical to transfer transactions of any value.
Instant payments with fast settlements - Transactions on the Stellar network settle in a matter of seconds, affording issuers the confidence that purchases are settled with finality.

Onboarding Digital Assets - Stablecoins offer an on-ramp into the blockchain economy and enable businesses to participate in new financial solutions powered by blockchain

Results

Lower Cost & Efficiency

AUDD significantly enhances operational efficiency by streamlining cross-border transactions and addressing the inefficiencies in traditional financial systems. By utilizing the Stellar network, AUDD provides more secure, transparent, and low-cost payments globally, making it an ideal solution for cross-border transactions, international trade payments, and treasury management

4 - 6

Intermediary banks removed that would be involved in a transfer on traditional financial rails. Each transaction also benefits from near-instant settlements in AUDD.

5.7%

Maximum potential loss per transaction removed by eliminating hidden currency conversion fees. In contrast, AUDD transactions cost mere USD cents, offering substantial savings.

Next Steps