QED Backs Cedar Money’s $9.9M Bet on Stablecoin Payments

U.S.-based fintech startup Cedar Money recently secured $9.9 million in seed funding, led by global fintech specialist QED Investors, to scale its stablecoin-backed cross-border payment platform and eliminate costly traditional banking inefficiencies in emerging markets like Africa. The funding round also saw active participation from Lattice, NIV, Stellar, and Wischoff Ventures, signaling a major surge in investor interest in blockchain-powered financial rails.

Bridging Fiat and Crypto for Faster Global Transactions

The newest generation of fintech startups is increasingly leveraging stablecoins—cryptocurrencies pegged to fiat currencies or physical commodities—to build payment solutions that are faster and cheaper than legacy banking networks. Cedar Money operates as a seamless bridge in this ecosystem. While businesses and individuals transact using a familiar, fiat-based interface, stablecoin settlements run quietly in the background to bypass international payment friction.

Targeting High Transaction Costs in Africa

Legacy cross-border payment inefficiencies are particularly damaging in Africa, where local businesses face exorbitant transaction fees and hidden currency conversion costs due to elevated regional risks. Traditional banks routinely profit from wide exchange rate spreads, adding a heavy financial burden to local enterprises.

“If you look at the SWIFT network, fees globally are around 2-3%, but in Africa, they’re much higher. It’s even more gouging in places where people have less money,” explained founder and CEO Benjy Feinberg.

Feinberg founded Cedar Money in 2022 after spending nearly a decade leading alternative financing provider Behalf. Before launching this new venture, he spent extensive time analyzing the next major shift in global fintech, ultimately identifying cross-border payments and blockchain integration as the most critical frontiers.

Why Emerging Markets Need Stablecoins

While stablecoins have faced slow adoption in the United States due to a highly developed domestic banking infrastructure and the dominance of the dollar, Feinberg recognized a completely different reality in developing economies. Businesses across Africa, the Middle East, and South America urgently require U.S. dollars to pay for global imports, even when trading with countries like China. However, acquiring physical dollars is incredibly difficult in nations struggling with weak local currencies, such as the Nigerian naira or the Argentine peso.

To address this, Cedar Money launched its operations in early 2024, focusing initially on Nigeria to help local businesses seamlessly accept and send international payments. “You want to go to a place where you can solve a big problem, and the adoption will be easier. That’s why we started in Africa — because the need is greatest here,” Feinberg noted.

Overcoming the Complexities of Global Compliance

Despite the growing popularity of digital assets, scaling stablecoin platforms globally presents distinct operational hurdles. According to Feinberg, building the core payment rails—converting fiat to stablecoins, transferring them, and converting them back—is relatively straightforward. The real challenge lies in developing robust compliance frameworks that accommodate the unique regulatory demands and heavy documentation requirements of different jurisdictions.

These compliance demands are especially complex in emerging markets, where basic requirements like verifying a physical street address can become a major operational hurdle due to infrastructure differences. Feinberg believes the industry winners will be those who can scale globally while navigating these complex regulatory landscapes, particularly in underserved regions.

“I would say the biggest challenge is to educate the banks in the developed world that the funds they’re getting from the underdeveloped world are good. It’s a challenge, but we’re doing it,” Feinberg stated.

The Shift in Global Stablecoin Adoption

A shifting regulatory environment in the U.S. is fostering a more favorable climate for digital assets, which could soon ease global compliance pressures. Industry experts believe this regulatory shift, combined with major corporate moves like Stripe’s acquisition of stablecoin startup Bridge, will drive broader institutional acceptance and encourage global regulators to adopt more progressive views on stablecoin integration.

This mainstream adoption is already reshaping global commerce. According to a recent a16z report, stablecoin transaction volumes have officially surpassed legacy networks like Mastercard, PayPal, and Visa. In Q2 2024, stablecoin transactions reached a staggering $8.5 trillion across 1 billion transactions, compared to Visa’s $3.9 trillion in volume across fifty times as many transactions.

Cedar Money currently processes tens of millions of dollars in monthly transaction volume. The startup focuses heavily on import and export businesses handling tangible goods, such as rice and footwear. By backing transactions with verified commercial invoices and physical commodities, Cedar Money simplifies the underwriting process for partner banks.

QED Investors partner Gbenga Ajayi highlighted that the fintech is “uniquely positioned to tackle the inefficiencies of the global financial system.” The payments company, which employs 14 people across Nigeria, the U.S., Israel, and Serbia, marks QED Investors’ fourth investment in Africa, following backing for Moniepoint, Precium, and Remedial Health.

A Massive Market with Room to Grow

While Cedar Money joins other emerging players like Conduit and Caliza in serving developing markets, Feinberg emphasizes that the market is far from saturated. Despite stablecoins reaching a $205 billion market cap last year, their collective share of the global international payments market remains tiny.

“Today, two-thirds of international payments are through the correspondent banking network. The size of the biggest fiat innovators is probably 2-5% of the market. So if you’re looking at this and you’re saying, well, two-thirds are the banks, 5% are the fiat innovators, and 0.01% are the stablecoins guys. Then your competition, or your way forward, is not to compete necessarily with other players; it’s just to find your little corner because the market’s just so big,” Feinberg concluded.