Toronto-based payments startup Cybrid has raised a $10-million USD Series A round to bring its stablecoin payment infrastructure to more enterprise clients, including Canada’s financial institutions.
Multiple Canadian tech companies are trying to bring a Canadian dollar-backed stablecoin to market.
BDC Capital’s Growth Venture Fund led the all-equity, all-primary round, which closed six weeks ago. The all-Canadian investment included Toronto’s Golden Ventures, as well as Montréal’s Luge Capital and Panache Ventures, building on its $3.8-million CAD seed round in 2022.
Founded in 2021, Cybrid sells payment infrastructure to allow businesses to integrate and support stablecoin and cross-border transactions. As of this week, it’s a payment service provider registered with the Bank of Canada.
CEO Avinash Chidambaram and CTO Brent Carrara previously founded the startup Ario together, which was acquired by FinTech company Driven (formerly Thinking Capital). Chidambaram worked at companies like Interac and Nortel, and also worked on BlackBerry Payments and ID.
Stablecoins are digital assets typically pegged to fiat-backed currencies, such as the United States dollar. According to venture capital (VC) firm Andreessen Horowitz, stablecoin transaction volume tripled that of Visa over the past year to reach $46 trillion USD.
In an interview with BetaKit, Chidambaram claimed that the company’s growth has quintupled over the past year, keeping pace with industry adoption. Chidambaram said that clients are understanding how stablecoin transactions are helpful for cross-border shipments and trade, as transfers are processed on the blockchain without a fee.
“We want this to flourish in Canada,” Chidambaram said. “Just as many Canadian companies are buying goods and services internationally.”
Multiple Canadian tech companies are trying to bring a Canadian dollar-backed stablecoin to market, including Stablecorp and Tetra Trust Group, backed by National Bank. At the same time, tech leaders like Coinbase Canada CEO Lucas Matheson have been pushing for Canada to develop a regulatory framework for the payment method.
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In September, Bank of Canada’s Ron Morrow indicated that the central bank should “weigh the merits” of federal stablecoin regulation as the payment method grows in popularity. Canada does not have a law regulating stablecoin use, but multiple sources told BetaKit they were are expecting “language” around stablecoins in the upcoming federal budget.
Chidambaram added that the US GENIUS Act, a stablecoin regulation in the US, helped “unlock” Cybrid’s growth. “It’s important that we look at it and adopt it in Canada,” he said.
While stablecoin transaction volume has grown, some experts have warned of the economic impacts of consumers storing money in stablecoin wallets instead of banks. According to the developing economy bank Standard Chartered, a potential $1 trillion USD could flow out of banks in emerging markets over the next few years for this reason.
Banks in Canada, according to Chidambaram, are getting on board with exploring support for stablecoins. Though he didn’t share the names of Cybrid’s largest clients, he said they comprise large financial institutions in Canada and the US.
The company employs 25 people and plans to build its support and operations teams. Cybrid plans to expand its support to Europe as it eyes demand for cross-border remittance transfers.
Feature image courtesy Cybrid.