Stablecoin infrastructure platform OpenTrade has raised $17 million in new funding.
The strategic round brings the U.K.-based startup’s total funding to more than $30 million and gives OpenTrade “the runway to scale at the pace the market is demanding,” as the company said in a post on LinkedIn Wednesday (May 6).
Mercury Fund and Notion Capital led the round, with participation from a16z crypto, AlbionVC and CMCC Global.
“The demand for yield infrastructure is growing rapidly. That demand is what’s driving our growth,” OpenTrade said in the post.
That post outlined examples of that growth: the company’s total value locked has just surpassed $200 million, while transaction volumes last year were more than $250 million. For the first four months of this year, it said, OpenTrade has processed more than $300 million, with north of $1 billion projected for the full year.
OpenTrade says it is working to address demand in three areas, including permissioned yield infrastructure for FinTechs and neobanks developing custodial stablecoin products, as well as “permissionless infrastructure for non-custodial platforms and asset issuers” in the decentralized finance (DeFi) space.
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The company also offers its Curation+ service, which curates “custom vaults with institutional-grade yield sources, in partnership with Five Sigma Finance, an FCA-regulated asset manager, delivering solutions that aren’t available anywhere else in the market.”
In other stablecoin news, PYMNTS wrote Wednesday about the digital assets’ utility in improving cross-border payments.
These transactions “remain a multi-trillion-dollar inefficiency embedded inside global commerce, weighed down by correspondent banking chains, pre-funded accounts, foreign exchange friction, compliance overhead and opaque fees,” the report said.
Stablecoins can provide a way to compress both settlement time and capital requirements at the same time. The crypto-sector term for a cross-border stablecoin settlement is a “bridge,” or a “stablecoin sandwich.”
The opportunity is especially ripe in emerging markets where access to dollar liquidity is uneven. In places with volatile currencies or constrained banking infrastructure, stablecoin-linked payment rails give businesses a more stable medium for cross-border commerce while remaining compatible with local payment networks.
However, the degree of innovation that stablecoins offer doesn’t come without its own new and native risks. Hacks on digital asset bridge solutions represent close to 40% of the entire value of cryptocurrency lost due to hacks across the entire digital asset sector’s history. Counterparty risk is a high-profile worry
“CFOs are, rightly so, conservative,” Tanner Taddeo, CEO of Stable Sea, told PYMNTS during a recent interview for the From the Block podcast. “They’re not buying innovation. They’re buying to de-risk something … It’s a crawl, walk, run approach to the enterprise because that trust does take time. It’s never given, it’s always earned.”