Exchanging U.S. dollars for Mexican pesos seems simple. But, at large enough scales and high enough speeds, transactions can get complicated, especially if businesses trade in the dollar-pegged digital tokens known as stablecoins. The Miami-headquartered startup XFX aims to make the foreign exchange process more efficient—for fiat and stablecoins—and has drummed up $17 million in a Series A fundraise, the company announced Thursday.
The crypto investor Castle Island Ventures, which has carved out a niche in making stablecoin bets, led the round. Other participants include Haun Ventures and Coinbase Ventures, both of which invested in XFX’s $9 million seed round. Santiago Alvarado, cofounder and CEO of XFX, declined to specify at what valuation his startup raised its most recent stash of capital.
“They’re building FX [foreign exchange] and payment infrastructure that matches the speed of stablecoins,” Chris Ahn, a partner at Haun Ventures, told Fortune.
Fiat to stablecoins
Stablecoins are one of the hottest sectors in fintech. Proponents say the tokens can speed up cross-border payments and reduce transaction fees, among other benefits. Venture capitalists have poured hundreds of millions into the space over the past year, backing buzzy startups like Zerohash, Rain, and KAST. And, last week, the payments goliath Mastercard agreed to buy the London-based company BVNK for up to $1.8 billion in the biggest deal yet for a stablecoin company.
