Bitcoin software firm Lightning Labs has secured a large funding round enabling it to further develop the Lightning Network for faster, cheaper Bitcoin and stablecoin transactions.
The $70 million Series B funding round was led by Valor Equity Partners, with participation from Baillie Gifford, Goldcrest Capital, and several other angel investors. Lightning Labs builds additional features and software for the Lightning Network (LN), Bitcoin’s layer-two transaction solution.
The funding will be channeled into a new protocol it has developed called Taro, which will enable stablecoins to be transferred using the LN, according to reports. Lightning Labs will not issue stablecoins, but the infrastructure will allow them to be sent over the network.
Stablecoin transactions were made possible with the Bitcoin Taproot upgrade in November 2021, which also introduced smart contract capabilities.
The firm believes that Taro will enable further Bitcoin adoption as it potentially allows the unbanked in developing countries to send money using stablecoins.
Speaking to Forbes, Elizabeth Stark, CEO and co-founder of Lightning Labs, said, “That’s really significant because the potential here is for all the world's currencies to route through Bitcoin over the Lightning Network.” Speaking to Tech Crunch, she added:
“If I were Visa, I’d be scared because there are a lot of people out there that have mobile phones, but now don’t need to tap into the traditional system.”
Lightning Labs raised $10 million from its Series A in September, which followed a $2.5 million seed round in 2018.
On Tuesday, enterprise software development firm MicroStrategy announced via a filing with the U.S. Securities and Exchange Commission (SEC) that its subsidiary MacroStrategy acquired 4,197 Bitcoin (BTC) ($190.5 million) between February 15 and Tuesday.
MacroStrategy has purchased an additional 4,167 bitcoins for ~$190.5 million at an average price of ~$45,714 per #bitcoin. As of 4/4/22 MicroStrategy #hodls ~129,218 bitcoins acquired for ~$3.97 billion at an average price of ~$30,700 per bitcoin. $MSTRhttps://t.co/Z45OuJU5KI April 5, 2022
The coins were bought at a weighted average price of $45,714, which is roughly equivalent to the price of the digital asset at the time of publication. As a result, MicroStrategy and its subsidiaries now hold a total of 129,218 BTC, with a total aggregate purchase price of $3.97 billion and an average purchase price of $30,700 per BTC.
The week prior, MacroStrategy closed a $205 million BTC-collateralized loan from leading fintech and crypto-fiat gateway bank Silvergate. The firm said it would use the loan to purchase more BTC while its own BTC deposits would serve as collateral for the borrowing, effectively turning it into a sophisticated leverage trade.
Microstrategy has been investing in BTC since August 2020, purchasing the digital asset every quarter almost consistently.
But recently, the SEC rejected its Bitcoin accounting practices, sending its shares plunging on that day. The firm had been using methods, in part, to negate the effects of the volatility of the crypto market. MicroStrategy founder, chairman and CEO Michael Saylor has been a Bitcoin permabull, citing the digital asset's potential as a "hedge against inflation" as part of his investment thesis.
Though last Friday, despite his bullish outlook, Saylor said that financial markets are not ready for Bitcoin bonds and that El Salvador's Volcano Bond was even riskier than his firm's BTC collateralized loan.
Georgia, the country on the Black Sea, is preparing to regulate its cryptocurrency market. National Bank of Georgia Governor Koba Gvenetadze told The Financial on Monday that the central bank has already developed a draft of the regulatory legislation in accordance with the requirements of international agencies.
Gvenetadze said the size of the Georgian crypto market is unknown, due to the lack of regulation. However, an estimate by Moneyval, the Council of Europe money laundering monitoring body, placed its monthly transaction volume at between 3.5 million and 5 million Georgian lari, or $1.09 million to $1.64 million, monthly, as of September 2020. Moneyval urged Georgian authorities to “strengthen the practical application of their measures to combat money laundering and financing of terrorism” at that time.
The coming legislation complies with international Financial Action Task Force (FATF) requirements, the central banker continued, and was written with assistance from the International Monetary Fund (IMF) staff. Currently, financial institutions in Georgia are not allowed to provide virtual asset exchange and transfer services, and clients engaged in activities with virtual assets are considered high-risk and are “subject to appropriate enhanced preventive measures.”
Gvenetadze did not specify a date for the introduction of the regulatory legislation in parliament.
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