Crypto Banking Startup Dakota Raises $12.5 Million to Expand Stablecoin Services

Crypto Banking Startup Dakota Raises $12.5 Million to Expand Stablecoin Services

Dakota, a crypto-integrated banking platform focused on serving businesses, has secured $12.5 million in a Series A funding round to enhance its stablecoin-powered banking offerings. The round was led by CoinFund, with additional participation from 6th Man Ventures and Triton Ventures, the company announced on Tuesday.

Expanding Stablecoin-Enabled Banking Solutions

Stablecoins—cryptocurrencies pegged to external assets such as the U.S. dollar—are gaining momentum in mainstream finance as instruments for faster and more cost-effective cross-border payments. This growth is supported by increasing regulatory attention in the United States, where the Senate recently passed the GENIUS Act and the House is preparing to vote on stablecoin legislation imminently.

Alex Felix, Chief Investment Officer at CoinFund, emphasized the transformative potential of stablecoins in business banking. He stated, “Dakota is unlocking that potential by combining the familiarity of a bank account with the power of crypto rails.” Founded by former employees of Coinbase, Square, and Airbnb, Dakota enables businesses to hold and transfer funds in U.S. dollars or stablecoins while utilizing established payment networks such as ACH, SWIFT, and SEPA. Clients can send and receive payments through traditional bank accounts without directly engaging with cryptocurrencies. Behind the scenes, Dakota leverages blockchain technology to settle transfers almost instantly, providing an alternative to conventional banking infrastructure. The company maintains full reserves for customer deposits, backed one-to-one by short-term U.S. Treasuries, to mitigate liquidity and counterparty risks.

With the fresh capital injection, Dakota plans to extend its services to over 100 countries, including the United Kingdom, the European Union, Singapore, and regions in Latin America. Dakota’s CEO, Ryan Bozarth, highlighted the company’s vision: “Business today is borderless, and dollars are a universal language. We want to give entrepreneurs from Bogotá to Bangalore the same access to U.S. dollar banking that a startup in San Francisco would have.”

Navigating a Competitive and Evolving Market

Dakota’s expansion occurs amid intensifying competition and shifting market dynamics. Established financial institutions are increasingly entering the stablecoin arena. JPMorgan recently filed a trademark for crypto services that may encompass a stablecoin initiative, while Fiserv has announced plans to launch a stablecoin offering targeted at banks. Additionally, Circle’s application to establish a national trust bank underscores the rapid evolution within the sector.

Despite the promising outlook, the stablecoin market remains volatile, influenced by regulatory scrutiny and changing investor sentiment. As Dakota seeks to scale its borderless banking platform, it faces the dual challenge of navigating complex regulatory developments and distinguishing itself in an increasingly crowded and competitive field.