Plasma Raises $20M to Build Bitcoin-Based Blockchain for Stablecoins

The fundraising round, spearheaded by Framework Ventures, will support the launch of Plasma's testnet and mainnet, reported Fortune on Thursday.

Plasma, a crypto startup, has announced raising $20 million in a funding round led by Framework Ventures. The funds will be utilized to develop a Bitcoin-based blockchain specifically designed for stablecoins, according to a report by Fortune on Thursday.

Plasma's goal is to address the challenges faced by stablecoins on existing blockchains, such as high fees and scalability constraints. By leveraging Bitcoin's security, Plasma aims to enable zero-fee USDT transactions.

Plasma was founded by Paul Faecks and a team of early Bitcoin and crypto contributors. The company previously raised $4 million from Bitfinex, Tether CEO Paolo Ardoino, venture capitalist Peter Thiel, and cryptocurrency traders Cobie and Zaheer Ebtikar of Split Capital.

Plasma is not charging a fee for each stablecoin transaction, but Faecks expressed confidence in the company's financial stability. "This is very much a scale business, and not a ‘need to make $18 and validate our revenue per transaction' type business,” he explained.

Plasma's recent funding round coincides with a broader upswing in the crypto market. Bullish Global, a crypto exchange founded by Thiel, is reportedly considering an IPO in 2025.

Meanwhile, Coinbase Global Inc. (NASDAQ:COIN) CEO Brian Armstrong has called for clear legislation regarding token classification and stablecoins, which could potentially attract more capital into the crypto market and further drive the adoption of stablecoins.