Crypto technology firm Lightning Labs said it is bringing in new financing as it creates a protocol to facilitate fiat currency transfers to Bitcoin.
The protocol -- called Taro -- aims to enable high-volume transfers instantly for fiat currencies and other assets, Lightning Labs said in a statement. Valor Equity Partners, Brevan Howard Asset Management LLP and Vlad Tenev, CEO of Robinhood Markets Inc., are among new investors in the $70 million, Series B financing round. While Valor Equity was an early backer of Tesla and SpaceX, hedge fund Brevan Howard has been ramping up its own, new crypto unit with capital and staff.
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Taro will help developers issue assets such as stablecoins on the Bitcoin blockchain and convert them to other assets through the Lightning Network. The network is a decentralized system that intends to eliminate the custodial risk associated with high-volume micropayments, its website states. The idea is to make the crypto assets more easily transferable at a low fee, globally.
“In essence, dollars will route through the Bitcoin monetary network using Lightning,” the firm said. “This new protocol cements Bitcoin in its place as the internet’s native digital money and protocol for value transfer.”
Lightning Labs, run by Chief Executive Officer Elizabeth Stark and backed by entrepreneur Jack Dorsey, said its in talks with stablecoin issuers about using its technology. Lightning’s network, which is layered over Bitcoin, facilitates fast, micro transactions that typically take Bitcoin’s blockchain longer to process. Through the infrastructure, customers can use Bitcoin to pay for purchases across large corporations like Starbucks and Twitter.
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Stark’s firm expects Taro to speed up use of Bitcoin payments and transfers among emerging markets. Her firm has helped expand such movement in El Salvador since its adoption of Bitcoin as legal tender last year.
Venture capital firms including Goldcrest Capital, Kingsway, Moore Strategic Ventures, bitcoin technology firm NYDIG and Silvergate Capital Corp. CEO Alan Lane also participated in the Series B funding round.
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