Klevo Partners With Bybit to Develop AUD Stablecoin and Mastercard Ecosystem

Klevo Rewards (ASX: KLV) has announced its wholly owned subsidiary Fly Wallet will partner with global digital asset platform Bybit to develop KLVAUD, an Australian dollar-backed stablecoin, alongside an integrated Mastercard payments and rewards ecosystem. The Klevo Bybit stablecoin partnership positions the company at the convergence of real-time rewards, digital assets, and payments infrastructure, unlocking access to Bybit’s established international user base.

Klevo partners with Bybit to launch Australian dollar-backed stablecoin and Mastercard ecosystem

The partnership centres on the development of KLV Coin (KLVAUD), designed to function as both a store of value and a rewards instrument within Klevo’s ecosystem. KLVAUD will be pegged 1:1 to the Australian dollar, with reserves held in segregated accounts with an Authorised Deposit-taking Institution (ADI). Bybit will fund the reserves as part of the Mastercard collateral arrangement.

Bybit will act as the global distribution partner, facilitating access to KLVAUD across its international user base whilst supporting custody, trading, and onboarding functions. The partnership includes a planned launch of a co-branded Bybit KLV Mastercard, enabling users to spend KLVAUD seamlessly at point of sale with real-time conversion between digital assets and fiat currency.

The parties will collaborate on a coordinated marketing rollout with a minimum annual commitment of AUD $500,000, supporting user acquisition campaigns, merchant engagement programs, and cashback-led promotions. This positions Klevo as a potential leader in embedded finance and digital rewards innovation, bridging traditional payments infrastructure with digital asset capabilities.

What is a stablecoin and why does KLVAUD matter?

Stablecoins are digital currencies pegged to traditional currencies to maintain stable value. Unlike volatile cryptocurrencies such as Bitcoin, which can fluctuate significantly in price, stablecoins aim to preserve purchasing power by maintaining a fixed exchange rate with fiat currency.

KLVAUD will maintain a 1:1 peg with the Australian dollar, meaning one KLVAUD token will always equal one Australian dollar. This stability makes it suitable for everyday transactions whilst retaining the utility benefits of digital assets, including faster settlement times and lower transaction costs compared to traditional payment rails.

Fly Wallet will operate KLVAUD under its Australian Financial Services Licence (AFSL), maintaining full compliance with Australian regulatory requirements. The stablecoin structure includes 1:1 reserve backing, transparent redemption rights, and independent reserve attestations. This regulatory framework differentiates KLVAUD from unregulated digital assets by providing investor protections comparable to traditional financial instruments.

For businesses, issuing stablecoins enables faster, cheaper transactions whilst maintaining price stability. For Klevo, KLVAUD represents an entry point into the growing stablecoin market, which bridges traditional finance and digital assets whilst maintaining regulatory compliance.

How the KLVAUD ecosystem generates engagement and revenue

Earning and spending mechanisms

Users will be able to acquire KLVAUD through two primary pathways: direct purchase via supported platforms including Bybit and other ecosystem participants, or earning through everyday spending activity.

The earning pathways through the Bybit KLV Mastercard include:

1. Card-linked cashback rewards
2. Purchase with fiat or alternative cryptocurrency
3. Merchant-funded incentives and promotions
4. Loyalty-based reward programs

The key differentiator from traditional loyalty programs is redemption flexibility. Unlike conventional points systems restricted to specific merchants or limited offer catalogues, KLVAUD can be spent anywhere Mastercard is accepted. This open-loop redemption model removes friction from traditional loyalty programs, potentially driving higher user engagement and transaction frequency by eliminating restrictions on where and how rewards can be used.

The closed-loop flywheel effect

The integration of payments and rewards is designed to create a closed-loop ecosystem where users earn KLVAUD through spending or purchase through channel partners, then redeem or reuse KLVAUD for future transactions. This continuous cycle is expected to increase transaction frequency, wallet stickiness, and overall platform engagement.

Merchants benefit from increased customer acquisition and retention through targeted incentives. By offering KLVAUD-based promotions, merchants can attract new customers and encourage repeat purchases, whilst Klevo captures value through multiple touchpoints in the transaction lifecycle.

This structure targets key platform metrics including transaction frequency, wallet stickiness, and overall engagement by creating incentives for users to remain active within the ecosystem.

Bybit partnership unlocks global distribution

Bybit’s role extends beyond simple distribution to encompass critical infrastructure functions. The platform will support custody services, trading capabilities, and user onboarding, providing the technical backbone for KLVAUD’s international expansion. Bybit’s established presence across key markets enables Klevo to access global distribution channels that would require years and significant capital to build independently.

The partnership includes Bybit funding the reserves as part of the Mastercard collateral arrangement, removing a significant capital requirement from Klevo’s balance sheet. This financial structure allows Klevo to scale the stablecoin offering without proportional increases in working capital requirements.

The coordinated marketing strategy with a minimum AUD $500,000 annual commitment will focus on:

• User acquisition campaigns
• Merchant engagement programs
• Cashback and rewards-led promotions

Strategic Impact

This initiative is expected to position Klevo as a leader in embedded finance and digital rewards innovation, unlocking multiple monetisation streams across payments, rewards and digital assets.

Bybit’s established infrastructure and user base provides immediate distribution scale. Rather than building these capabilities from scratch, Klevo gains access to an operational platform supporting user onboarding, asset custody, and transaction processing across multiple jurisdictions.

Agreement status and what comes next

The parties have entered into a heads of agreement (HoA) and intend to progress towards definitive agreements. The HoA is non-binding other than standard provisions, and there can be no certainty that definitive agreements will be finalised or that the proposed initiatives will proceed.

The three agreements currently in negotiation are:

• Stablecoin Distribution Agreement
• Platform Licence Agreement
• Amendments to existing BIN sponsorship arrangements

Initial development and rollout costs are expected to be funded from existing working capital. However, the company has noted the potential for additional capital raising if required. As the arrangement remains at an early stage under a non-binding HoA, Klevo is not yet able to quantify the potential financial impact of the proposed program.

The progression from HoA to definitive agreements represents the critical next milestone. Whilst the detailed commercial structure and Bybit’s commitment to fund reserves demonstrates serious intent from both parties, investors should monitor for definitive agreement announcements before assessing the partnership’s material impact on Klevo’s financial position.

Investment outlook for Klevo’s fintech expansion

The Klevo Bybit stablecoin partnership represents a strategic pivot towards fintech infrastructure, with three potential growth drivers: KLVAUD adoption among users and merchants, expansion into global markets via Bybit’s distribution channels, and the development of an integrated rewards and payments ecosystem.

The initiative is positioned to unlock multiple monetisation streams across payments processing, rewards program management, and digital asset services. However, given the early stage of the arrangement, the financial impact cannot yet be quantified with precision.

Key execution risks include:

• Regulatory environment continues to evolve, with changes in applicable laws potentially impacting the ability to issue, distribute, or support KLVAUD
• Execution dependent on finalising definitive agreements from the current non-binding HoA
• Adoption by users and merchants not guaranteed, with success contingent on achieving meaningful transaction volumes
• Counterparty risk, with reliance on third-party partners including Bybit and banking providers

Reserve and liquidity management represents an additional consideration. KLVAUD’s value proposition depends on maintaining adequate AUD reserves and effective redemption mechanisms. Any failure to maintain sufficient reserves or facilitate timely conversion between digital assets and fiat may impact user confidence and adoption rates.

Success depends on converting the HoA into binding agreements and achieving meaningful user adoption through Bybit’s distribution channels. The partnership framework provides the structure for international expansion, but execution will determine whether Klevo can establish a material position in the intersection of digital assets and payments infrastructure.

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