In a significant development for the cryptocurrency sector, Plasma, a startup focused on building a Bitcoin-based blockchain tailored for stablecoins, announced the successful raising of $20 million in funding. This round of investment, disclosed on Thursday, was led by Framework Ventures and aims to support Plasma’s upcoming testnet and mainnet launches, along with the company’s expansion into sectors such as remittances, payments, and decentralized finance (DeFi) applications.
This latest funding round follows a previous $4 million investment, which featured early backers including Bitfinex, Tether’s CEO Paolo Ardoino, venture capital mogul Peter Thiel, and prominent crypto traders such as Cobie and Zaheer Ebtikar from Split Capital. Their backing underscores the growing interest and confidence in Plasma’s vision for stablecoins.
Stablecoins have emerged as a pivotal element in the cryptocurrency ecosystem, with supply exceeding $220 billion and their usage increasingly extending to everyday transactions and saving mechanisms. Despite Bitcoin’s status as the longest-running blockchain, the majority of stablecoin activity is currently concentrated on newer platforms like Ethereum, Tron, and Solana.
Plasma’s innovative approach involves creating a sidechain on the Bitcoin blockchain, ensuring full compatibility with the Ethereum Virtual Machine (EVM), which is integral to many DeFi applications. The Plasma team is committed to addressing the existing challenges that stablecoins face on current blockchains—such as high transaction fees and scalability constraints—by leveraging Bitcoin’s robust security while facilitating zero-fee USDT transactions.
According to Paul Faecks, the Founder and CEO of Plasma, “Stablecoins are the clear winner in blockchain adoption, yet they’re treated as second-class citizens on current blockchains. By leveraging Bitcoin as a foundation, zero-fee USDT transfers, alongside a purpose-built ecosystem and infrastructure for stablecoins with deep liquidity, Plasma creates the most secure, scalable, and efficient blockchain for stablecoins on the market.”
As Plasma moves forward with its ambitious plans, the industry keenly awaits the impact of a blockchain that merges Bitcoin’s security with the growing demand for stable and efficient transaction solutions.
