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Multicoin and Coinbase Ventures invest in Latin America-focused stablecoin payment app El Dorado
El Dorado, the Colombia-based stablecoin protocol, said on Tuesday that it has completed a $3 million seed round of venture capital investment to build a crypto payments “superapp” for the Latin America region.
Multicoin Capital was the lead investor, with cryptocurrency exchange Coinbase’s venture capital arm, Coinbase Ventures, UC Berkeley Skydeck and Awesome People Ventures participating in the round.
Stablecoins they are a $160 billion asset class within cryptocurrencies, with their prices pegged to an external asset, predominantly the US dollar. They are increasingly popular in developing regions such as Latin America with less developed banking systems and a history of currency devaluations.
Dollar-pegged stablecoins are also a cheaper option than traditional banking and remittance systems for sending money abroad.
“Latin America’s economy is reeling from decades of inflation,” Guillermo Goncalvez, co-founder and CEO of El Dorado, said in a statement. “To make matters worse, local cross-border exchanges charge excessive fees: an astonishing 6% for a normal currency exchange. The combination of these two forces makes it nearly impossible for the people of Latin America to retain or grow their wealth,” he said. added.
El Dorado, available in Argentina, Brazil, Colombia, Panama, Peru and Venezuela, offers a cheaper way to send, exchange and pay using blockchain as a payment channel. The platform charges a 0.6% fee for cross-border payments, significantly lower than the industry average, while in-app payments are free.
The app is connected to more than 70 local payment methods to make it easy to get in and out of fiat currencies. Supports Tether USDTCircle USDC and Celo Dollar (cUSD) on the Tron, Polygon, and Celo networks, but also allows bitcoin (BTC) transactions.
The app has processed about one million transactions in the past year, the company said.