Sphere raises $2.8 million to accelerate global access to stablecoins
Sphere Laboratories (“Sphere”), the “operating system for stablecoins”, today announced the close of its $2.8m seed round. The round was co-led by The Chernin Group (TCG Crypto) and Jump Crypto, with participation from Hudson River Trading, Republic Capital, Big Brain Holdings, Solana Ventures, SteelDAO, Stakeholder Ventures, and various angel investors including Solana co-founders Anatoly Yakovenko and Raj Gokal.
The Landscape
Stablecoins increased in market capitalization by 700,000% from $20 million in 2017 to $140 billion in 2024. At the same time, stablecoin transfer volume reached over $7 trillion per year in 2022 and $1.2 trillion in Dec. 2023 alone, outpacing all major card networks except Visa.
Stablecoin adoption comes as no surprise. The introduction of SWIFT in 1973 and the current correspondent banking model has struggled to keep pace with technology developments. In a digital world with accelerating data propagation, over 40% of banks still run on legacy software written in COBOL. This and factors like the rise of internet native settlement has contributed to a 20% decline in intermediary correspondent banks, which let foreign banks accept dollars. With US dollars in 90% of global FX and used to denominate the majority of the world’s debt, the need for more accessible dollars has skyrocketed.
The need for alternatives is especially accentuated in emerging markets. Latin America and Oceania had the biggest decline in correspondent relationships, a foreseeable result given the credit and risk constraints of developing regions. This is despite massive growth, with emerging market remittance outflows reaching $669 billion and a $39.3 trillion business cross-border payments market in 2023. Hence, their over-representation for stablecoin adoption despite challenging roadblocks such as poor user experience hindering potential growth.
The Product:
Sphere is paving the way for merchants from under-addressed emerging markets to access cost-effective, secure, and near instant cross-border payments via stablecoins. In the same way that an operating system is the fundamental interface between a computer and a user, Sphere is building the software that connects end-users with stablecoins. Through beautiful and accessible graphic user interfaces (GUIs), Sphere orchestrates blockchains, custodial infrastructure, and financial service providers to make stablecoin payments accessible. On-the-ground efforts in Latin America & the Caribbean have led to early traction, including a first $1m volume day and greater than 1,000% month-over-month growth since the start of 2024.
The Founding
Sphere began with a global hackathon win in a payments category sponsored by Stripe. Co-founders Arnold Lee and Luigi Charles met as Columbia undergrads in 2015. Bonding over shared experiences of financial upheaval, they became best friends and built software together. Arnold grew up with parents born during the Korean War, who would eventually emigrate during South Korea’s Third Republic dictatorship and after the Vietnam War. Luigi’s family fled Guyanese hyperinflation and authoritarianism in the 1980s, before settling in The Bahamas. Seeing the effects of financial exclusion locally, Luigi started his career at traditional asset managers such as Vanguard and Franklin Templeton. Given a family background in construction, Arnold got his first taste of distributed systems engineering at IoT startups.
Although they had exposure to crypto as early as 2009, “It wasn’t until we saw digital dollars on-chain where it hit. Wow. This just makes a lot of sense. We can explain this to friends and family back home, and it’s obvious how this would have made a big difference. My dad used to remit money back to Korea by paper mail. No credit history, no bank account. Stablecoins would have saved him decades in starting over,” said Arnold Lee, CEO.
“Open access to the world’s reserve currency can be assumed in the developed world,” added Luigi Charles, CTO. “If you happen to be born in a place with local inflation and outdated or little financial infrastructure, you’re sort of stuck. Correspondent dollar accounts and FDI become hard to obtain because now you’re considered ‘high risk.’ The result is that each year, your purchasing power decreases faster than wage growth. No matter how much you try to stay afloat, you slowly sink. The only way out is to emigrate, further entrenching this limbo.”
Since inception, Sphere has partnered with leading web3 companies such as Helium, Latitude.sh, Squads, DRiP, and Helius. This brought the attention of non-crypto native merchants who sought to use stablecoins to modernize their cross-border payments. With surging demand in Latin America, Sphere is on-the-ground to serve customers in countries like Mexico, Chile, and Brazil. Sphere’s seed funding will enable the company to further invest in engineering and compliance resources to reduce costs and increase access for end-merchants.
If their mission of accelerating accessible value transfer around the world resonates with you, the team is hiring across sales and engineering. Otherwise, if you are a merchant facing high cross-border payment fees or just don’t know how to get started with stablecoins, visit https://spherepay.co/ to learn more.
Contact information:
Angel Herrera
+1 781 402 9988
team@spherepay.co
