Fiat Republic, a London-based startup building tools for cryptocurrency platforms to process fiat currencies from banks, has raised $3.5m (£2.58m) in seed funding.
It was backed by Speedinvest, Seedcamp and Credo. The company will use the extra capital to grow its headcount, which currently stands at 14. It will also accelerate its efforts to become regulated in the UK and EU.
The funding round comes less than one year after Adam Bialy founded Fiat Republic in June 2021. The cryptocurrency investor became frustrated with the “clunkiness” of topping up his crypto wallets and so he decided to build a single API that bridges the gap between cryptocurrency platforms and banks.
The banking-as-a-service business model aims to make it easier for cryptocurrency platforms to access mainstream and local payment networks in Europe and beyond.
“By creating an API that facilitates seamless data exchange between both traditional and crypto players, we believe we can foster transparency and better understanding between both sides, which in the future will benefit the whole,” said Adam Bialy, CEO and co-founder of Fiat Republic.
The startup said it will make money via transaction and account-based fees, with “monthly minimum fees linked to transactional volume that they process through our platform”.
Fiat Republic is competing with the likes of Clear Junction, Januar and BCB for a slice of the $2bn cryptocurrency banking-as-a-service market, which is growing 20% annually.
The crypto startup plans to exit beta mode with existing customers during this quarter.
Fiat Republic also said it’s creating a consortium of crypto platforms that will promote “responsible practices” in the cryptocurrency industry in a bid to win support from regulators.
“The crypto industry as a whole is still in its infancy,” explained Baily. “We believe that by bringing crypto platforms into a single body under the Fiat Republic Consortium, we can increase our collective standing with regulators and enhance our leverage with big banks, who, until now, have dictated the terms of access to fiat-based on harsh internal risk policies, often conceived mainly out of fear of the unknown.”
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