Mesh Raise $82m and Acquisitions Heat Up

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Introduction

Welcome to the Tokenized newsletter, brought to you by the creators of the Tokenized Podcast; Simon Taylor of Fintech Brainfood and Pet Berisha of Sporting Crypto. 

We are the newsletter for institutions that need help preparing for a Tokenized future.

We run through the headlines every week, what it means for you and a market readout. Always with an institutional, business-focused perspective. 

Join us every week as we meet your Tokenization needs.

Stories you can’t Miss 📰 

⛓️ Ethena and Securitize launch Converge, a new institutional-grade EVM chain for tokenized assets

Ethena Labs, the tokenization firm behind synthetic dollar products USDE and USDtb, plans to move their $6bn ecosystem to a new EVM chain called Converge, built alongside Securitize.

Key Points:

• The platform aims to address the unique regulatory, security, and settlement requirements of traditional financial institutions

• Converge will support both permissioned and permissionless use cases to accommodate various institutional needs

The Tokenized Take:

• This partnership is a major milestone in bridging traditional finance with crypto-native products as the platform will serve as the issuance layer for Ethena's stablecoins (USDe, USDtb, and iUSDe) alongside Securitize's tokenized products.

• The institutional-grade infrastructure could accelerate the adoption of tokenized securities and other real-world assets, which currently represent just $100bn compared to global capital markets.

• Some more crypto-native detractors claim that this is a step back for permissionless blockchain infrastructure. Although using converge will be permissionless, validators will be permissioned. It’s no shock to see this because institutions at scale still approach this space with caution, understandably so.

💰 Mesh raise $82m in Series B funding

Key points:

• Mesh, the crypto payments infrastructure company, has secured $82 million in Series B funding.

• The round was led by Paradigm with participation from Consensys, QuantumLight, and YOLO Ventures.

• Mesh enables users to pay with crypto assets they already own at merchants that accept stablecoins. They have built over 300 integrations with exchanges and wallets to create a unified payment experience.

The Tokenized Take:

• This is another significant investment in crypto payments infrastructure, showing continued institutional interest despite broader market volatility

• This follows the trend of substantial funding and acquisition for crypto payment solutions, including Stripe’s acquisition of Bridge, MoonPay's acquisition of Iron, and BVNK’s $50 million Series B led by Haun Ventures.

• Mesh’s significant transaction volume growth (300% QonQ) is another clear indicator of stablecoin adoption. 

On the latest episode of Tokenized… CEO & Co-Founder Bam Azizi said:

🏢 Abu Dhabi's state-linked MGX invests $2 billion in Binance

Key points:

• This represents one of the largest sovereign investments in the crypto industry to date.

• The investment comes as Binance works to rebuild after regulatory challenges in multiple jurisdictions.

The Tokenized Take:

• Sovereign wealth entering crypto at this scale signals the legitimization of digital assets at the highest levels.

• Middle Eastern sovereign entities continue to position themselves as leaders in the future of financial innovation.

• The investment may help Binance navigate its regulatory challenges with enhanced capital and institutional backing.

📊 Coinbase Is in Advanced Talks to Buy Derivatives Venue Deribit

Key Points:

• Coinbase is reportedly in advanced negotiations to acquire Deribit, one of the largest crypto derivatives exchanges.

• The deal could be valued at over $2 billion, according to sources familiar with the matter.

• Deribit is known for its crypto options and futures trading infrastructure that caters to institutional clients.

The Tokenized Take:

• This is a big deal. It is likely to be the biggest acquisition in digital asset history.

• This potential acquisition would significantly expand Coinbase's derivatives offerings, a growth area for crypto trading.

• Consolidation in the exchange space continues as larger players seek to diversify revenue streams beyond spot trading. Coinbase has done a successful job diversifying their revenue stream already. In their most recent earnings, their revenue from retail trading dropped from 82% in 2023 to 59% of revenue in 2024.

• The move suggests Coinbase's strategy to become a comprehensive financial services provider in the digital asset space.

🐙 Kraken acquires NinjaTrader for USD 1.5 billion to expand into the US

Key Points:

• Crypto exchange Kraken has acquired NinjaTrader, a futures and securities brokerage platform, for $1.5 billion.

• This comes at a time when Kraken is gearing up to IPO.

• The acquisition gives Kraken direct access to regulated US futures markets and traditional securities infrastructure. NinjaTrader’s CFTC-registered FCM license allows Kraken to offer crypto futures and derivatives in the U.S.

• NinjaTrader brings close to 2 million users to the Kraken ecosystem.

The Tokenized Take:

• This marks one of Kraken's largest strategic moves to expand beyond pure crypto into traditional financial markets.

• The acquisition reflects the growing convergence between crypto and traditional finance infrastructure.

• Established crypto exchanges are increasingly seeking regulated pathways to offer comprehensive financial services to their users.

📰 Some More News:

🏦 Tokenization & Finance

• Goldman, Moody’s, HKMA join Canton Network governance (Read more here)

• Nasdaq Shift to Round-The-Clock Stock Trading Partly Due to Crypto, Says Exchange Executive (Read more here)

• Fidelity Files for Onchain U.S. Treasury Fund, Joining the Asset Tokenization Race (Read more here)

• Coinbase Introduces KYC-Verified Liquidity Pools for DeFi Swaps and Trades (Read more here)

• Tether is in talks with 'Big Four' firm about reserve audit, CEO says (Read more here)

🤑 Funding

• Crypto card issuer Rain raises $24.5 million in round led by Norwest Venture Partners (Read more here) 

• Data Storage Protocol Walrus Raises $140M in Token Sale Ahead of Mainnet Launch (Read more here)

• Privy raises $15 million round led by Ribbit Capital (Read more here)

• Crossmint raises $23.6m led by Ribbit Capital (Read more here)

• Crypto wallet provider Utila lands fundraise from NYCA Partners (Read more here)

• MoonPay lands $200 million credit line from Galaxy to handle Trump memecoin-like frenzies (Read more here)

💼 Government & Policy

• U.S. Government Removes Tornado Cash Sanctions (Read more here)

• Australian government outlines 'fit for purpose' digital asset framework plans to become a 'global industry leader' (Read more here)

• SEC says proof-of-work mining does not implicate US securities laws (Read more here)

• Ripple CEO says legal battle with SEC 'has ended' (Read more here)

Stablecorner ⚖️ → Tether was the 7th largest buyer of U.S. treasuries in 2024…

Tether, the company behind the world's largest stablecoin USDT, has become the 7th largest buyer of U.S. Treasuries in 2024, surpassing major nations like Canada, Taiwan, and Mexico.

With a $33.1bn increase in Treasury holdings this year, Tether now stands among sovereign nations in its Treasury buying power. This places the stablecoin issuer ahead of significant economies like Mexico, Norway, and Germany, and not far behind countries like Singapore and the United Kingdom.

Why This Matters:

1. Stablecoins Are Becoming Macro Players: The scale of Tether's Treasury purchases reflects the explosive growth of stablecoins as a dollar equivalent in global markets. With USDT's market cap now exceeding $115 billion, its reserve management has real macroeconomic significance.

2. Transparency Pays Off: After years of scrutiny regarding its reserves, Tether's significant Treasury holdings demonstrate its commitment to maintaining dollar-backed reserves. This transparency has helped fuel USDT's continued growth. This is only going one way, as Tether is looking for a Big 4 accountancy firm to provide even more granular and reputable audits.

3. Stablecoins Issuance as Yield Generators: The Treasury holdings generate significant yield for Tether, with current Treasury rates around 5%. This creates a multi-billion dollar annual revenue stream from reserve management alone.

4. Global Dollar Access: Tether's growth indicates strong demand for dollar exposure through crypto rails, especially in emerging markets where traditional banking access may be limited.

For perspective, only the Cayman Islands, France, Luxembourg, Belgium, Singapore, and the United Kingdom purchased more Treasuries than Tether in 2024. Meanwhile, major economies like Japan and mainland China were net sellers of U.S. debt.

As stablecoin supply continues hitting all-time highs (now exceeding $235bn across all issuers), their role in global financial markets and monetary policy will only increase.

Simon’s Market Read Out 💬 

Tweets of the Week 🐤 

From Nick Tomaino

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