Crypto payments infrastructure firm Merge raises $9.5M

Crypto payments infrastructure firm Merge raises $9.5M

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Merge, a Web3 payments infrastructure provider startup, today announced that it raised $9.5 million in seed funding to develop its banking and payments platform to “merge” crypto and traditional financial services.

The round was led by Octopus Ventures and included big-name crypto investors such as Coinbase Ventures, Hashed, Alameda Research and Ethereal Ventures.

The service Merge provides is a way for companies to hold and transfer funds and easily convert them between cryptocurrencies as well as manage compliance. All of this happens within the company’s simple-to-integrate application programming interface and seamless interface.

As Web3 has grown, otherwise known as the decentralized web, more opportunities for what is known as decentralized finance have expanded, which rely heavily on token economies. Although it’s easy to exchange these tokens for one another using different decentralized Web3 apps, reliable onramps and offramps between Web3 and banks are still difficult to come by.

Of critical importance for businesses and banks engaged with Web3 and DeFi is that transactions with tokens can incur regulatory interests such as anti-money laundering laws, Know Your Customer, taxation compliance and more.

“As the crypto economy moves further into the mainstream, it’s increasingly clear that the current financial infrastructure isn’t fit to serve the rapid expansion of crypto-native businesses and many providers aren’t specialized enough to gauge risk,” said Zihao Xu, an investor at Octopus Ventures.

Merge makes all of these payment challenges more accessible to banking partners easier with its easy-to-integrate API. Through the API, Web3 companies receive solutions to instantly create bank accounts, send payments seamlessly and convert payments between money and crypto tokens. The solutions also include licensing and compliance monitoring as well.

“Merge’s vision is to build the infrastructure necessary to allow crypto businesses to operate without fear of shutdown by regulators or third-party risk teams,” Xu added.

The company raised this funding amid a recent cryptocurrency market downturn as currencies such as Bitcoin dropped below $30,000 in early May, the lowest since July 2021. During the same time, the stablecoin TerraUSD lost its parity with the US Dollar and its related cryptocurrency Luna lost 99% of its value in a massive market crash further creating market volatility.

In spite of the disfavorable market conditions, venture capital has continued to pour into Web3, including Andreessen Horowitz’s raise of $4.5 billion in its fourth crypto fund last week.

“We see it as a temporary blip,” Merge co-founder Kebbie Sebastian told CoinDesk. “The fundamental potential of cryptocurrency remains the same despite market volatility.”

Image: vjkombajn/Pixabay

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