The first regulated blockchain infrastructure company, Paxos, has announced that multinational Bank of America will be joining its $300 million Series D round. Bank of America joins other well-known investors like Paypal, cryptocurrency exchange platform Coinbase, and FTX. We're seeing many institutions seeking infrastructure companies to help with their journeys into blockchain and digital assets.
Similar to other big banking institutions, Bank of America is coming around to digital assets and cryptocurrency. With investors' interest increasing, many traditional financial institutions want to expose their clients to the "beginning of a technological transformation" as Paxos, CEO, Charles Cascarilla stated. With a new market emerging, many banks are turning into infrastructure systems that can potentially restructure the global financial system.
The demands for crypto infrastructure companies are increasing.
Just as competing infrastructure company Fireblocks completes its Series D round, Paxos rivals the valuation just slightly over $2 billion at $2.4 billion. Paxos raised a total of $540 million across multiple rounds. The series round was led by venture growth-equity fund Oak HC/FT. Bank of America's investment comes after an announcement in May that it joined Paxos Settlement Service, which allows for same-day stock trades.
In July, Bank of America created a research team to explore this growing industry, emerging asset class, and all the implications that are involved with it. Bank of America also announced that it will start to allow Bitcoin futures trading for its clients. With many institutions feeling increasing pressure from clients for more exposure, institutions are looking to partner with blockchain infrastructure companies since they appear to bridge the gap between innovation and regulation.
What the future holds for Paxos and Bank of America
With this round complete, Paxos looks to accelerate its growth by hiring across all departments and functions, scaling its operations, and increasing the platform capacity while investing in optimizing innovation. Any remaining liquidity will be put back into the platform to enhance the overall customer experience and increase the use of its tokens. To continue developing the platform, Paxos plans to establish a Paxos National Trust Bank, support the application for a Clearing Agency registration with the SEC, and pursue its Major Payment Institution license in Singapore.
As the second-largest bank in the U.S. and not seasoned in the blockchain space, funding Paxos shows a major step into what Bank of America might speculate will be the economy's future. Bank of America tested the waters with stock clearing, which was significant because the technology promises to slash the time it takes to clear a stock trade from days to minutes. As the third bank invested in Paxos, the value that blockchain infrastructure companies possess is becoming more evident.
With Paxos gaining four major investors, many people wonder whether or not it will get acquired. As more traditional financial institutions look towards safer ways for their clients to be exposed to cryptocurrency, can levels of regulation bring in mass adoption to blockchain?