Cryptocurrency Transaction Infrastructure Provider Transak Secures $16 Million in Funding from Tether, IDG Capital, and Additional Backers
Transak, a leading crypto payments infrastructure provider, has secured a strategic funding round of $16 million, co-led by Tether and IDG Capital [1]. The funds will be used to scale Transak's stablecoin payments network and expand into new markets such as Latin America, Southeast Asia, and the Middle East [2].
The rapid growth of the stablecoin payments market, expanding from about $130 billion in early 2024 to about $270 billion, may contribute to Transak's expansion plans [3]. Tether's strategic investment, via the dominant stablecoin USDT, which holds about 60% of the total market capitalization, reflects the importance of integrating such offerings into global payments and remittances infrastructure [1][3].
Transak's infrastructure includes multi-level KYC (know-your-customer) systems, fraud prevention, and banking partnerships to meet regulatory requirements across diverse markets [2][3]. The company emphasizes compliance with a comprehensive regulatory framework, maintaining licenses and approvals required to operate fiat-to-crypto payment rails legally.
Stablecoins are central to Transak’s service, enabling fiat-to-stablecoin conversions through local payment methods, virtual IBANs, and cards [3]. Transak currently processes approximately 30% of its $2 billion payments from stablecoin flows [4]. The company aims to increase this proportion as stablecoins increasingly serve as the transaction and value-transfer layer on the internet.
In the competitive landscape, Transak positions itself as a leader in fiat-to-crypto and stablecoin infrastructure, currently integrated with over 450 applications and combining fiat on/off ramps with real-time liquidity routing [2][3]. The involvement of major backers like Tether and IDG Capital signals strong confidence in Transak’s growth potential amidst rising global demand for compliant crypto payment infrastructure.
The signing of the GENIUS Act, a stablecoin-focused bill, may create opportunities for companies like Transak in the stablecoin industry [5]. The act provides a clear framework for the regulation of cryptocurrencies pegged to fiat currencies and how banks can integrate digital currencies into their systems.
According to Sami Start, CEO and co-founder of Transak, stablecoins are no longer just a crypto asset, but the rails for global value transfer [6]. Making stablecoins usable at scale requires more than just liquidity, Start states. Transak's expansion plans may involve further increasing the use of stablecoins in its payments network.
In conclusion, Transak’s expansion strategy involves scaling stablecoin payment infrastructure into new emerging markets while ensuring compliance with complex regulatory environments through licenses and KYC systems. Its strong funding and partnerships position it as a significant player in the growing stablecoin payment space.
References: 1. Crunchbase News 2. TechCrunch 3. CoinDesk 4. Transak Blog 5. Cointelegraph 6. Transak Blog
News of Transak's strategic funding round of $16 million highlighted an investment by Tether, a prominent player in the finance industry and the dominant stablecoin USDT, signaling an emphasis on integrating stablecoin offerings into global infrastructure. With the growth of the stablecoin payments market and the passing of the GENIUS Act, Transak aims to expand its technology and services into new markets, emphasizing compliance and increasing the use of stablecoins in its payments network. [Crunchbase News, TechCrunch, CoinDesk, Cointelegraph, Transak Blog]
