Novatti Group (ASX:NOV) announces stablecoin deals with Stellar and Ripple


by Melissa Darmawan

Novatti Group Limited (ASX:NOV) CEO and Managing Director Peter Cook discusses Novatti's stablecoin deals with Ripple and Stellar.

Melissa Darmawan: Thanks for tuning in to Finance News. I'm Melissa Darmawan. Joining us again is the Chief Executive Officer of Novatti Group (ASX:NOV), Peter Cook. Peter, nice to see you.

Peter Cook: Mel, hello. Great to be back. Thank you.

Melissa Darmawan: Always lovely to have you here. Now, Novatti has recently announced two deals around your stablecoin services. Talk us through it.

Peter Cook: We've been able to announce partnerships with both Stellar and Ripple, two of the major cross-border blockchain networks, both based out of Silicon Valley and both with very high market capitalisations, relatively. Ripple, we've done a lot of work with in the past for cross-border payments, and Stellar, we had started on a blockchain program with them a number of years ago, but now we're really bringing it to life. So, we're building a multi chain stablecoin service, initially on both the Ripple and Stellar chains. And, in fact, what's a great thing is both Ripple and Stellar are largely funding the development work, and even some of the marketing work, that we do to get our stablecoin service out. So, the stablecoin will be a dollar-for-dollar-backed Australian dollar stablecoin. So, we are a licensed company. We will be running our funds in trust accounts. And then we've got an Australian dollar stablecoin named AUDC, somewhat in line with the nomenclature of the US stablecoin, USDC.

Melissa Darmawan: I know, just a couple of weeks ago, we were just talking about the role of digital assets with Novatti. Can you loop that in, in regards to the strategy now?

Peter Cook: So, stablecoin for us is essentially a major foray into digital assets. We are still a payments company, a traditional payments company, but this now gives us a major entre between… let's call it cryptocurrency, which goes up and down and is subject to other market forces, and real utilitarian crypto-based assets. So, we build the stablecoin. It becomes part of our ecosystem or our infrastructure, which is licences, tech, commercial partnerships. And from there we leverage and monetise for our either financial services customers or end business type customers. We will provide services out as stablecoin as a service and also for holding and transacting of funds for things such as cross-border payments, on-ramp off-ramp for cryptocurrencies and other services yet to be seen. In terms of partnering with Ripple and Stellar, I mean, they are two of the major networks. We've been able to work with them and be a major partner of theirs in Australia. And I think that goes to a lot of the success of Novatti, is that we can work with these global companies and bring through significant commercial deals.

Melissa Darmawan: So, how do you see this impact on your revenues?

Peter Cook: Melissa, for the next year, at the least, we'll have revenues will be a number of the payments from Ripple and Stellar for their grant programs that ameliorate our tech build costs and some of our marketing costs. As we start to monetise later this year, then we'll start to get transaction fees from the stablecoin service as well.

Melissa Darmawan: Let's talk about your results. So, I know you also recently announced some quarterly results. Talk us through the highlights.

Peter Cook: The March quarterly results, our revenue was about 10.4 million. On a like for like basis with our December results, we'd gone from 6.3 million to 6.8, and then the increase from 6.8 to 10.4 was the Malaysian company, ATX, starting to come into our accounts. Against a prior calendar period for Novatti itself, we were up about 60 per cent quarter on quarter for prior calendar period. And then, with ATX coming in, we're now over $10 million a quarter. So, you know, really great growth results. So, we're bringing in stablecoin services. It adds to the other services that we're providing. We've been growing the company at about 50 per cent per annum. If we continue to do that for the next 12 months, our aim is to get to cashflow positive last quarter of financial year '23, and really show the market that we will be a profitable major global payments company.

Melissa Darmawan: Exciting times ahead. Peter Cook, great to see you back in Sydney again.

Peter Cook: Thanks, Melissa.


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