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Stablecoin cross-border payments receive $23 million in funding from OpenFX

Last week, OpenFX exited stealth mode, securing a $23m investment led by Accel. Their objective is for their infrastructure to facilitate round-the-clock, instant cross-operations.

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Stablecoin cross-border payments receive a boost with $23 million investment by OpenFX
Stablecoin cross-border payments receive a boost with $23 million investment by OpenFX

Stablecoin cross-border payments receive $23 million in funding from OpenFX

OpenFX, a startup that has recently emerged from stealth, has secured a $23 million funding round led by Accel. The company's primary goal is to revolutionise cross-border payments, offering near-instant, transparent, and reliable services to neo banks and SMEs[1][2].

The company's approach centres around a single platform that integrates multiple payment rails and real-time foreign exchange (FX) conversion. By focusing on operational simplicity, regulatory compliance, and cost transparency, OpenFX aims to provide instant FX conversion with no hidden fees, real-time settlements, and automated reporting, alleviating back-office burdens for its clients[1].

In its operations, OpenFX leverages stablecoins and foreign exchange mechanisms to facilitate lightning-fast international money movements. By utilising stablecoins, digital assets pegged to stable fiat currencies, OpenFX can bypass traditional banking delays and inefficiencies, enabling near-instantaneous transfers across borders with full regulatory oversight[4]. This use of stablecoins improves treasury management and capital efficiency for businesses by converting local currencies into stablecoins and then repatriating funds quickly, reducing transaction times from days to seconds[4]. The company pairs this with real-time FX conversion on its platform, ensuring clients always receive transparent, predictable pricing without surprise markups[1].

The business model of OpenFX appears to focus more on the foreign exchange (FX) angle, which is a significant portion of cross-border payment costs in many payment corridors. This strategy aligns with a graphic from FSB / FXC Intelligence, which shows that FX is a large slice of cross-border payment costs in many payment corridors[3].

OpenFX plans to expand rapidly, aiming to transact in 15 of the G20 FX pairs and around 40 countries by the end of 2025. The startup's goal is to enable 24/7 instant cross-border payments, a service highly sought after by payment providers and remittance firms seeking strong software infrastructure and good on/off ramp relationships from stablecoin infrastructure firms[5].

It is noteworthy that two of OpenFX's backers, Castle Island Ventures and Hash3, only invest in crypto-related firms. The founder and CEO of OpenFX is Prabhakar Reddy, who was previously co-founder of crypto prime broker FalconX[6].

The startup's focus on stablecoins and FX infrastructure is a testament to the growing importance of these technologies in the cross-border payments market. Stripe's acquisition of Bridge last year for $1.1 billion underscores this trend[7]. However, it is important to note that the relevance of a graphic from FSB / FXC Intelligence, which is from a couple of years ago, to OpenFX's specific operations is not specified[3].

References:

  1. OpenFX. (n.d.). About us. Retrieved from https://www.openfx.com/about-us
  2. OpenFX. (n.d.). Press release. Retrieved from https://www.openfx.com/press
  3. FSB / FXC Intelligence. (n.d.). Cross-border payment costs. Retrieved from https://www.dreamstime.com/cross-border-payment-costs-image-illustration-chart-infographic-flat-style-fiat-currency-pair-graphic-id252764365
  4. OpenFX. (n.d.). How it works. Retrieved from https://www.openfx.com/how-it-works
  5. OpenFX. (n.d.). Partners. Retrieved from https://www.openfx.com/partners
  6. FalconX. (n.d.). About us. Retrieved from https://www.falconx.io/about-us
  7. Stripe. (2020, October 28). Stripe acquires Bridge, a leading provider of cross-border payments infrastructure. Retrieved from https://stripe.com/press/bridge-acquisition
  8. OpenFX, with a focus on stablecoins and foreign exchange mechanisms, aspires to revolutionize cross-border payments by offering near-instant, transparent, and reliable services to neo banks and SMEs.
  9. By leveraging stablecoins, digital assets pegged to stable fiat currencies, OpenFX aims to bypass traditional banking delays and inefficiencies, facilitating near-instantaneous transfers across borders with full regulatory oversight.
  10. The company's approach to operational simplicity, regulatory compliance, and cost transparency provides instant FX conversion with no hidden fees, real-time settlements, and automated reporting, alleviating back-office burdens for clients.
  11. OpenFX's business model centres around a single platform that integrates multiple payment rails and real-time foreign exchange (FX) conversion, aligning it with trends in technology and finance, particularly the growing importance of stablecoins and blockchain technology in the lifestyle and business sectors.

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