Stable High Performance: Investors Flock to Stablecoin Infrastructure

As cryptocurrencies reach new all-time highs, venture capitalists are directing their attention and resources to a particularly hot area of the blockchain industry: stablecoin infrastructure. These digital currencies aim to maintain a fixed exchange rate of 1:1 to fiat currencies like the US dollar. This dynamic market situation has enabled the British company BVNK, which specializes in stablecoin infrastructures, to complete a Series B funding round of 50 million dollars. This entirely equity-based round was led by the crypto-focused megafund Haun Ventures, with participation from Coinbase Ventures and existing investor Tiger Global. BVNK's current valuation is estimated at about 750 million dollars, although the company declined to comment on this figure. The investment follows the most valuable acquisition in the history of the crypto industry: Stripe, a giant in payment processing, acquired the startup Bridge for stablecoin infrastructure for 1.1 billion dollars in October. This event drew the attention of many investors and fintech operators who had shunned the blockchain industry over the tumultuous past two years. Bridge had previously announced a funding round of 58 million dollars, supported by Haun Ventures as well as generalists Sequoia, Ribbit, and Index. Jesse Hemson-Struthers, co-founder and CEO of BVNK, described his company in an interview with Fortune as a "global leader" in the field of stablecoin infrastructure and saw the Bridge acquisition as validation, although BVNK has been operating since 2021. "Every competitor of Stripe is now approaching us and asking how they can enter this area," Hemson-Struthers told Fortune. The initial vision of cryptocurrencies like Bitcoin was to create a global peer-to-peer payment system that doesn’t require intermediaries like banks or governments. Despite the increased popularity of Bitcoin and other cryptocurrencies, most people mainly use them for speculative purposes or as a store of value. The exception is stablecoins: Tether is the undisputed market leader here with a market capitalization of about 140 billion dollars, followed by USDC, supported by Circle and Coinbase, with a market capitalization of about 42 billion dollars. Stablecoins offer a more stable value investment for crypto investors as well as people without access to the dollar, although the exchange between fiat currencies and stablecoins is still costly and complicated.