Cedar Money raises USD 9.9 mln in seed funding for stablecoin adoption

Improving cross-border payments through stablecoins

While stablecoins have struggled to gain traction in the US due to limited use cases and competition with traditional systems like the USD and SWIFT, new startups are focusing on stablecoins, aiming to optimise cross-border payments and build solutions that work faster and cheaper than classic financial rails. Cedar Money aims to scale its payment infrastructure and solve the inefficiencies in international payments using the funding.

These inefficiencies are more visible in Africa, where businesses face higher and hidden transaction fees in currency conversions because of added risk and the costs of working with local banking. Banks often profit from exchange rate spreads, adding another layer of expense.

Businesses across Africa, the Middle East, and South America need dollars to pay for imports, even when buying from countries like China. In Nigeria or Argentina, getting dollars can be a struggle due to weak local currencies. Cedar Money launched in 2024, starting operations in Nigeria and helping businesses in the country accept and send money globally.

Adoption of stablecoins and limitations

According to a16z, stablecoin transaction volumes were negligible in 2017 compared to traditional systems. In 2024, stablecoins have surpassed Mastercard, PayPal, and Visa, reaching USD 8.5 trillion across 1 billion transactions in Q1 2024.

However, stablecoin platforms face limitations that may affect their scale across markets. Converting fiat to stablecoins, transferring them, and converting them back is challenging. Cedar Money aims to address these issues by building compliance rails to accommodate every country’s unique regulatory requirements and every bank’s documentation to ensure legitimate transactions.

These requirements are harder to accommodate in markets like Africa, where infrastructure differences make seemingly simple demands, such as providing a street address, much more challenging.