Cryptocurrency exchanges often face a number of challenges, one of the most significant being debanking - believe me, I know! Despite going as far as testifying at a Senate hearing about the detrimental impact debanking had on my life, the lack of action (albeit laziness) from government and politicians meant that problems I faced were those to face alone.
Through these trying times I persevered with finding a solution; not only for myself, but for others in the industry affected as well. While I haven't found the holy grail yet (a bank that is pro crypto) I think I have found a petty decent work around for the interim. I've tested it myself, and have provided my findings for you all below.
Modern problems require modern solutions - Welcome to AUDD
AUDD is Novatti’s A$ stablecoin intended for facilitating transactions and remittances between businesses and their customers. Unlike some other stablecoins that limit their use to corporate-to-corporate or intra-corporate transactions, AUDD is unlimited by design.
AUDD is an Australian Dollar stablecoin, 1:1 backed by Australian Dollars. This means, for every cent of AUDD on the blockchain, there is the equivalent amount backing it in the bank.
While AUDD is only currently available on the Stellar Blockchain, it will soon be issued on Ethereum, and XRP ledger. For more information on AUDD, check out their website.
This guide has been written based on the tested use of AUDD on Stellar.
Setting Up an AUDD Enabled Wallet
The first step is to get an AUDD-enabled wallet. Some top choices for AUDD wallets include Lobstr (if you're on a mobile device), StellarX, or StellarTerm. After getting your wallet, you will need to fund it with XLM (Stellar Lumens) to establish a trustline to AUDD. A balance of 10 XLM is recommended for this purpose and to cover future blockchain transaction fees.
It is best to consult the FAQ of your chosen wallet provider on how to correctly establish a trustline. To ensure you are establishing your trustline to the right asset, the issuer url should read audd.digital.
For fiat on/off ramp functionality, sign up directly on the AUDD Digital platform. Not only does it allow sending/receiving of AUDD, it also allows you to fund your account with fiat AUD to buy AUDD, or sell AUDD to fiat AUD which you can withdraw to your bank account. However, you must remember not to direct your customers to send payments to your AUDD Digital account, as this would result in the payment being stopped due to mismatched names.
Receiving AUD Payments from Customers
To receive AUD payments from customers, it is advisable for them to sign up on the AUDD Digital platform as well. Once they've submitted their KYC information for due diligence and funded their account with AUD, they can buy AUDD and send it to your exchange for crypto. The process can be streamlined under certain circumstances, such as an AUDD gateway integration or DCE authorisation. You can reach out to me for more information.
Sending AUD Payments to Customers
To send AUD payments to customers, again, request that they sign up on the AUDD Digital platform. After they submit their KYC information, you can send the required AUDD to their wallet, which they can then sell and deposit into their bank account. This process can also be streamlined with an AUDD gateway integration or DCE authorisation.
Converting AUDD to Other Cryptocurrencies
If you run a brokerage service (such as an OTC desk or a p2p trading service) then its likely you will need to buy back the crypto you have just sold in order to replenish your stock. There are a number of ways you can do this:
On the Stellar DEX
If you wish to buy back USDC or XLM after a trade, you can purchase these with AUDD directly on the Stellar DEX, a decentralized exchange. Wrapped versions of Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Bitcoin Lightning, or XRP can also be purchased with AUDD on the Stellar DEX. All trading operations can be executed directly within the wallets listed above using the orderbook or the automatic “swap” function.
On Centralised Exchanges
While AUDD isn't listed on any centralised exchanges as of now, you can use a workaround to gain access to liquidity. By selling or swapping AUDD for USDC on the Stellar DEX, you can send the USDC to a centralised exchange like Binance, WhiteBit, OkCoin, Bitso, CEX.io, or PDAX that accepts Stellar USDC. From there, you can trade your USDC for any asset of your choice.
On AUDD Digital
AUDD Digital does have an OTC desk that allows you to trade AUDD for other cryptocurrencies and visa versa. As of writing, this is not an advertised service as its still in testing. However, you can reach out to the AUDD Digital support team to gain access to this feature - just mention this blog post for easy access!
Benefits of Using AUDD
AUDD offers many advantages including instant payment settlements, no chargebacks, and reduced paperwork since AUDD Digital handles all the KYC/AML requirements. Moreover, off-shore entities are welcome, allowing you to conduct transactions in the tax jurisdiction of your choice!
To sum it up?
By incorporating AUDD into your cryptocurrency exchange operations, you can effectively navigate the challenges of debanking and offer your customers a seamless and secure trading experience. Need help setting up? Be sure to reach out via the contact page!
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