Tether Backs Arcanum Capital Fund Focused on Web3 Technologies

Stablecoin issuer Tether has made a novel venture capital fund investment into an Arcanum Capital fund dedicated to supporting decentralized technologies.

Tether’s support of the Arcanum Emerging Technologies Fund II aims to speed the development of the bitcoin ecosystem, the intersection of blockchain and artificial intelligence (AI), blockchain infrastructure, payments innovations, privacy-focused technologies and other Web3 technologies, the companies said in a Friday (Dec. 27) press release.

“In a world increasingly shaped by geopolitical tensions and macroeconomic uncertainty, the need for resilient technology to safeguard our freedoms has never been more crucial,” Paolo Ardoino, CEO of Tether and chief strategy officer at Holepunch, said in the release. “We are proud to partner with Arcanum Capital to stand at the forefront of empowering people with the tools and knowledge to protect their sovereignty.”

A portion of the fund will focus on companies using Tether’s stablecoin and Holepunch’s technology that enables the creation of apps that don’t use servers, according to the release.

The fund aims to use decentralized technologies to make digital applications more resilient, secure and equitable, per the release.

“[Tether’s] contribution not only signals a strong vote of confidence in us as asset managers, but also validates our unique mission and approach,” James McDowall, managing partner of Arcanum Capital, said in the release. “Our passion lies in the transformative technologies we invest in, and we are proud to have Tether alongside us in supporting this mission.”

Stablecoins and crypto payments are emerging as twin engines driving innovation in both consumer and business transactions, PYMNTS reported Dec. 18. The transparency, security and programmability of the underlying technology of stablecoins and crypto payments — blockchain — create opportunities for innovation.

In the case of stablecoins, they are emerging as a tool to bridge the gap between traditional financial technology and cryptocurrencies by offering the efficiency and transparency of blockchain technology while providing the familiarity and stability of fiat currencies, PYMNTS reported in October.

Tether issues USDT, which is the world’s largest stablecoin, accounting for nearly three-quarters of the stablecoin market. However, as a result of the European Union’s Markets in Crypto-Assets Act (MiCA), Tether is pulling issuance and operational support for its euro-pegged stablecoin, EURT, in the region.