Exchanging U.S. dollars for Mexican pesos seems simple. But, at large enough scales and high enough speeds, transactions can get complicated, especially if businesses trade in the dollar-pegged digital tokens known as stablecoins. The Miami-headquartered startup XFX aims to make the foreign exchange process more efficient—for fiat and stablecoins—and has drummed up $17 million in a Series A fundraise, the company announced Thursday.
The crypto investor Castle Island Ventures, which has carved out a niche in making stablecoin bets, led the round. Other participants include Haun Ventures and Coinbase Ventures, both of which invested in XFX’s $9 million seed round. Santiago Alvarado, cofounder and CEO of XFX, declined to specify at what valuation his startup raised its most recent stash of capital.
“They’re building FX [foreign exchange] and payment infrastructure that matches the speed of stablecoins,” Chris Ahn, a partner at Haun Ventures, told Fortune.
Fiat to stablecoins
Stablecoins are one of the hottest sectors in fintech. Proponents say the tokens can speed up cross-border payments and reduce transaction fees, among other benefits. Venture capitalists have poured hundreds of millions into the space over the past year, backing buzzy startups like Zerohash, Rain, and KAST. And, last week, the payments goliath Mastercard agreed to buy the London-based company BVNK for up to $1.8 billion in the biggest deal yet for a stablecoin company.
Founded in 2025, XFX hopes to draft off of that momentum. The company’s three cofounders met while they were employees at Bitso, the Latin American exchange that lets traders buy and sell Bitcoin, Ethereum, and other cryptocurrencies. Alvarado is a former civil engineer-turned-fintech founder. Jason Losh is a longtime developer who eventually led a team of 300 at Bitso. And Alberto Sánchez Tello has a traditional finance pedigree working for companies like Deutsche Bank, UBS, and BlackRock.
At Bitso, the trio grew frustrated with how difficult it was to exchange stablecoins for Latin American fiat currencies, like the Mexican peso, said Alvarado, XFX’s CEO. Crypto transactions happen in seconds, but bank transfers can take days. So, the trio teamed up to create a company that would make the foreign exchange process quicker and more efficient. XFX has built what Alvarado describes as an “engine” to match buyers and sellers of currency more easily, among other enhancements. “How can we process the maximum amount of volume with a minimum possible amount of capital?” said Alvarado. “That is what we’re trying to build.”
In addition to letting customers swap between stablecoins, XFX lets customers exchange three fiat currencies: the U.S. dollar, the Mexican peso, and the Colombian peso. Instead of first focusing on breadth of coverage, the startup aims to create deep liquidity in a subset of currencies before expanding outward. In other words, XFX wants customers to be able to trade between two currencies without one transaction significantly affecting prices.
The startup’s current clients include financial institutions, money transmitters, and crypto exchanges, said Alvarado, declining to specify with whom they’re working. With their new injection of capital, XFX plans to hire more “quants,” or math-savvy traders, as well as expand the startup’s relationships with trading desks and banks.
Credit: Source link
