Anchorage Digital and AngelList have made it easier to invest in companies through crypto. The partnership, announced today, allows AngelList early stage investors to use USDC, the second largest stablecoin, to fund young businesses.
This is the first time that both native and traditional companies have been able to raise funds using cryptocurrency. USDC investments will be accepted by all investors of companies willing to accept cryptocurrency investment. Anchorage Digital, the first federally leased crypto bank, will provide custody and execution of digital assets.
“During the investment flow, there is the option to invest in USD or USD,” says Avlok Kohli, CEO of AngelList.
Investors will be able to fund companies directly through their crypto wallets. Instead of cashing out and reinvesting crypto funds, a process that can delay payment for up to 30 days between bank transactions and approvals, investors can now use their cryptocurrency directly. Users can also exchange bitcoin or other cryptocurrencies in USDC to make investments.
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Despite the bear market conditions, venture capitalists invested $18.3 billion In crypto-related startups in 2022, even after pulling out of other industries. Now, non-crypto companies are jumping on the crypto bandwagon and accepting stablecoin investments.
the drawing? “Instant settlements,” says Diogo Monica, president and co-founder of Anchorage Digital. He says cryptocurrency allows transactions to be instant. No more bank bookings, no more waiting for Mondays or holiday delays.
“For companies to use them, they are effective,” he says. “For customers who already have encryption, you can do that and you can manage it.”
Allowing investors to use USDC also opens the door for those outside the US.
“The reality is that you have a lot of people outside the US who find it very difficult to open a dollar bank account,” Monica adds. Foreign restrictions on opening dollar accounts can make it difficult for foreign investors to invest in companies in the first place. The dollar is still the dominant currency in the world.
Mónica asserts that the use of stablecoins like USDC, “makes it a lot easier for everyone, not just for crypto companies, to use dollars, but for everyone.”
As an AngelList investor himself, Monica sees the benefits of facilitating investment opportunities for international players. “Not long ago I had to wait on wires, ACHs, wait forever and have my transactions frozen by my bank, had to call to unfreeze and unfreeze them,” he says. “And it’s things that don’t really happen in coding with the infrastructure we’ve built.”
Monica emphasized that Anchorage is a federally licensed bank and must remain compliant with the regulatory regime. “It uses the cryptographic aspect of the traditional infrastructure, because that’s the traditional infrastructure, traditional banking, all rails and all compliance,” he adds. “We’re meeting the same guidelines, we’re just using a different kind of technology.”