M^0, the innovator behind a new decentralized infrastructure layer for cryptodollar assets, has raised $35 million in Series A funding. The funding coincides with the launch of M^0’s core protocol and on-chain governance mechanism on the Ethereum Mainnet.
The Series A funding round was led by Bain Capital Crypto, and joined by Galaxy Ventures, Wintermute Ventures, GSR, Caladan and SCB 10X, alongside previous backers. The latest funding round follows a $22.5 million seed round led by Pantera Capital in 2023.
The stablecoin market, currently valued at around $160 billion, is anticipated to swell to over $9 trillion by 2028. Ripple recently announced to launch a US dollar-pegged stablecoin.
M^0 is described as a “money middleware” for the digital era, offering both a decentralized on-chain protocol and a suite of off-chain standards and APIs. This setup facilitates a federation of cryptodollar issuers, enabling independent institutions to utilize M^0’s middleware to mint their own fungible cryptodollar assets.
The leadership team at M^0 includes veterans from MakerDAO and Circle, suggesting a robust foundation of expertise in both DeFi and traditional financial systems. The design of M^0’s financial infrastructure adopts an institutional-grade approach, aiming to empower institutions to issue decentralized, interoperable, and fungible cryptodollars.
Stefan Cohen, a Partner at Bain Capital Crypto, highlighted M^0’s unique approach: “Stablecoins are the largest and fastest growing asset for settlement on public blockchains today. We expect this market to continue to grow quickly to trillions of dollars over the next decade.”
According to Cohen, M^0’s strategy of leveraging short-term treasuries to back its stablecoins is impressive.
Paul Veradittakit of Pantera Capital drew parallels between M^0’s ambitions and the legacy of major payment networks, stating, “What Visa, Mastercard, and American Express have done for payments, M^0 wants to do for value distribution.”
At the core of M^0’s technology is an innovative open federation mode that allows the issuance of stablecoins backed by high-quality reserve assets like U.S. treasuries. This model permits multiple entities to mint a unified, fungible cryptodollar known as ‘M’. These minters bring their own standardized, high-quality collateral and, once approved by the governance protocols, connect to M^0’s decentralized platform to produce ‘M’. Independent entities known as Validators ensure continuous verification of the collateral and adherence to the standards.
Luca Prosperi, President of the M^0 Foundation Council, emphasized the shift from outdated to modern financial infrastructures.
“We are transitioning from an outdated monetary infrastructure dominated by large, centralized parties, to a much more modern, federated framework for cryptodollar issuance. We reject a future cluttered with non-interoperable and riskier forms of money,” Prosperi said in a statement.
Will Nuelle, General Partner at Galaxy Ventures, added: “The stablecoin sector continues to see innovation with a wave of tokenized-treasury and other products entering the market. But one area where there’s been a lack of solutions is multi-issuance and interoperability, or singleness of money.”
Read Also: PayPal Enters The Next Era of Finance with the Launch of its Dollar-backed Stablecoin PYUSD
