Stablecoin Issuer Paxos Buys Crypto Wallet Startup Fordefi: Here’s All
The digital finance space is currently experiencing a major revolution, as traditional finance (TradFi) institutions and fintech companies are largely integrating blockchain technology to stay ahead of the curve. Thus, the intersection of TradFi and DeFi is increasingly becoming blurred.
In a pivotal move, Paxos, a leading stablecoin issuer and blockchain infrastructure provider, has acquired Fordefi, a New York-based crypto wallet startup. This strategic acquisition marks a major milestone in Paxos’ efforts to expand its DeFi capabilities and provide its customers access to a broader range of digital assets and services.
With its stablecoin, PYUSD, boasting a market capitalization of $3.6 billion, Paxos is well-positioned to capitalize on the growing demand for DeFi services. The acquisition of Fordefi will enable Paxos to enhance its wallet solutions and provide its customers with easy access to DeFi protocols.
Unveiling Paxos’ 0M Deal with FordeFi
Earlier today, Paxos announced via a press release its plans to deepen its involvement in the DeFi space with a potential acquisition of Fordefi, a startup specialising in digital asset storage solutions. In a deal valued at over $100 million, Paxos has purchased the crypto wallet startup, with specific terms remaining undisclosed.
“We’ve built Paxos as a neutral, enterprise-grade platform that ushers the world’s leading enterprises into the digital asset economy,” stated Paxos CEO Charles Cascarilla. Commenting on the acquisition of Fordefi, Cascarilla added,
“Fordefi has built an impressive stack and customer base founded on easy-to-use APIs and seamless web3 connectivity. Market participants require a regulated platform partner that meets their range of complex custody needs. Together, Paxos and Fordefi provide customers with a world-class custody solution built upon advanced wallet technology and regulated, qualified custody. We’re excited to welcome Fordefi to our team as we enter this new phase of growth.”
Why is this Deal Important?
Significantly, this strategic acquisition marks a major development as Paxos continues to expand its reach in the broader DeFi ecosystem. With a proven track record of partnering with major financial giants like PayPal and Nubank, Paxos is capitalizing on the growing demand for DeFi services.
Acknowledging the possibilities of this alliance, Fordefi CEO Josh Schwartz stated,
“Joining Paxos allows us to bring our technology to an even broader audience while maintaining our focus on security, usability and innovation. Together, we will offer enterprises the unified custody and stablecoin infrastructure they need to deploy real-world digital asset use cases at scale.”
The deal with a startup focused on crafting crypto wallets tailored for decentralized finance applications suggests that Paxos’ customers are eager to tap into a crypto domain that was previously considered restricted for traditional finance. Cascarilla posited, “We have customers that want to be able to access DeFi and have the right capacity to do that.”
This development seems particularly interesting as it highlights a significant shift in the approach to decentralized finance. DeFi has traditionally been considered a high-risk segment of the crypto ecosystem. While it offers users the potential for high-yield returns through decentralized lending networks, these protocols are also vulnerable to hacks and scams.
Nevertheless, over the past year, large corporations have begun to cautiously enter the DeFi space. Last week, WalletConnect partnered with The Open Network, opening hundreds of wallets to clients. Also, banks have started to tokenize money-market funds, using blockchain technology to create digital wrappers around these financial instruments.
