Tether Backs Ark Labs in $5.2M Round to Expand Stablecoins on Bitcoin
Tether's investment arm has invested in Arch Labs, developer of a programmable Bitcoin infrastructure arcade, as part of a $5.2 million funding round to expand stablecoin capabilities on the Bitcoin network.
According to Thursday's announcement from Ark Labs, the investment is intended to support infrastructure that enables stablecoins such as USDT (USDT) to efficiently mine, transfer and settle Bitcoin (BTC).
A Lugano, Switzerland-based startup is developing an execution layer designed to support fast, programmatic transactions on Bitcoin. The funding brings the company's total funding to $7.7 million.
Other investors in the seed round include Sats Ventures and Contribution Capital with participation from Anchorage Digital. Details on the size of the various shares have not been disclosed.
At the moment it does not appear among the Bitcoin chains according to the data of Defillama, which shows about $ 161 billion in stablecoins on Ethereum (ETH) and 86 billion on Tron (TRX) for a total stablecoin market capitalization of around 315 billion.
Tether's independent investment arm deploys capital from the company's profits and reserves into companies that build infrastructure around digital assets and related technologies. The portfolio spans sectors including financial services, artificial intelligence, energy and digital media.
Arkade is intended to enable developers and institutions to build applications on top of Bitcoin, such as payments and financial services, by enabling more complex transaction logic than the base layer it currently supports.
The investment comes as Tether, a USDT issuer, led the largest investment round by market capitalization of $50 million in sleep technology company Eight Sleep to integrate artificial intelligence agents into its products.
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Companies expand financial infrastructure on Bitcoin
While Bitcoin has not traditionally been known for supporting complex financial applications, a growing number of companies are building infrastructure aimed at expanding the use of Bitcoin beyond payments and financial applications.
In the year In 2023, Bitcoin infrastructure company Lightning Labs released the main alpha of Taproot Assets, a protocol to allow stablecoins and other assets to be mined on Bitcoin and transferred over the Lightning network.
Other initiatives include Rootstock, a Bitcoin-based mining-secured smart contract platform that supports decentralized finance (DeFi) applications connected to the network.
Institutional players have begun to integrate financial layers based on Bitcoin. In February, crypto custodian provider FireBlocks said it would integrate the Stacks blockchain, a decentralized financial overlay for Bitcoin, to offer institutional clients access to loans and opportunities tied to Bitcoin-based DeFi.
In March, Bitcoin staking infrastructure developer Babylon Labs said it would work with a hardware wallet maker to allow users to hold their assets themselves and lock their bitcoins into programmable storage.
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