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U.S.-based fintech firm CFX Labs disclosed Wednesday that it raised $9.5 million in seed investments to expand its Solana blockchain-based stablecoin payment and remittances network globally.
The fundraising was oversubscribed, the firm said in a press release, with Shima Capital, Decasonic, Antalpha, CMT Digital, Corazon Capital, Kraken Ventures, New Form Capital and Illinois-based Metropolitan Capital Bank & Trust participating.
Remittances are one of the most compelling use cases for stablecoins, as transactions on the blockchain can settle almost instantly, offer lower fees and are open 24/7. U.S. dollar-backed stablecoins are digital dollars in a token form and serve as a key role in bridging traditional currencies and blockchain-based digital assets.
CFX Labs' payment network enables people to send and receive fiat dollars overseas to countries such as India, Mexico and Nigeria using the firm's proprietary stablecoin fxUSD and the Solana (SOL) blockchain as payment rail for transactions.
Customers can also initiate money transfers from brick and mortar convenience stores across the U.S including Walmart, CVS, Walgreens and Rite-Aid. When users deposit cash, they receive digital dollars in the company's MoveMoney embedded wallet.
Since MoveMoney opened in October, customers have opened some 4,000 accounts, founder Nick Cavet said in an interview with CoinDesk.
The company will use the fresh investment to expand its network to more countries, aiming to reach 1.2 billion people by 2024 Q2, according to the press release.
"CFX Labs plans to expand into new geographies and has an enormous total addressable market, encompassing over one billion people who have sent or received remittances globally with a product that boasts low fees, convenience and quick settlements," Stuti Pandey, principal of Kraken Ventures, told CoinDesk in a note.
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CORRECTION (Nov. 15, 15:53 UTC): Metropolitan Capital Bank & Trust is based in Illinois, U.S., not in the Philippines.