SS #118 - Velocity Raises $38M for Stablecoin Treasury

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Good morning.

Velocity's $38M round is really a signal about where the stablecoin thesis is heading, with Ripple and Coinbase both backing the same neutral treasury layer despite competing on issuance, suggesting the next phase of adoption depends less on which stablecoin wins and more on who controls the settlement infrastructure underneath.

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In Today's Edition:

• Headline: Velocity Raises $38M for Stablecoin Treasury

• Quick Bites: US banking groups Wants Stronger Stablecoin Provisions

• Yield of the Week: reUSDe/USDe LP: 20.91% APY

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HEADLINE

State of play: Velocity closed a $38M Series A led by Dragonfly and FirstMark, backed by Coinbase and Ripple, betting that corporate treasury and settlement is the wedge for stablecoin adoption rather than payments alone.

• The round brings Velocity's total funding to nearly $50M since May, following a $10M pre-seed led by Activant Capital last year.

• Participants include Activant Capital, Capital One Ventures, QED Investors, Coinbase Ventures, and Wintermute Ventures alongside the co-leads.

• Velocity's platform shortens settlement times and removes prefunding requirements for cross-border capital movement without requiring treasury overhauls.

• The company connects stablecoin networks with traditional banking rails, card networks, and processors to reduce FX friction.

• New capital will expand Velocity's global banking network and deepen regulatory capabilities for enterprise and institutional demand.

What’s Next: Watch whether Velocity converts partnerships into signed enterprise clients over the next two quarters.

Why it Matters: Removing prefunding requirements is the real unlock, cross-border treasury costs mostly come from idle correspondent capital, not FX spreads.

Our Take: The "connect traditional rails with stablecoins" pitch is now table stakes, so the real question is whether Velocity's compliance depth is an actual moat.

QUICK BITES

• JCB signs Circle MOU to test stablecoin payments in Japan.

• Mizuho says Circle bank approval doesn't solve USDC growth.

• Dragonfly, FirstMark lead $38M Series A for stablecoin startup Velocity.

• US-UK taskforce unveils crypto roadmap promoting stablecoin innovation.

• US banking groups urge Senate to strengthen stablecoin provisions in CLARITY.

• Japan’s biggest card network taps Circle to bring stablecoins to 40M merchants.

YIELD OF THE WEEK

reUSDe/USDe LP: 20.91% APY

• The pool accepts reUSDe deposits and provides liquidity for re.xyz's insurance-backed yield token, maturing December 10, 2026, with ~$4.45M in pool liquidity and also earning 5x Sats and 40x Re points for KYC-verified users.

• Capital is split across reUSDe SY (~$1.09M, 24.5%) and PT reUSDe (~$3.36M, 75.5%), earning a blended yield from underlying yield, LP fees, and PENDLE rewards plus 131.80 daily PENDLE rewards.

• Yield is generated from re.xyz's insurance underwriting activity, with LP APY composed of 16.98% USDe yield, 2.18% LP fees, and 1.74% PENDLE rewards.

Core USDT0 (Mystic Finance): 12.9% APY

• The vault accepts USDT0 deposits and allocates capital across XRP ecosystem collateral markets on Flare, curated by Clearstar, with ~$21.85M in total deposits and ~$2.67M in available liquidity.

• Capital is primarily deployed into FXRP/USDT0 at 98.92% allocation (~$21.62M), with smaller positions in stXRP/USDT0 (~$121.57k) and WFLR/USDT0 (~$113.99k) markets.

• Yield is generated from lending demand across XRP-collateralized markets, with stXRP generating the highest market APY at 29.52%, net of a 10% performance fee.

AUSD (Steakhouse/Box): 10.69% APY

• The vault accepts AUSD deposits and allocates capital across term-locked strategies including Pendle PT tokens held to maturity and repo positions, with ~$4.22M in total deposits and ~$1.22M in available liquidity.

• Capital is split between Box Term AUSD (~$2.94M, 2.98% APY) and Steakhouse High Yield Instant via Morpho V2 (~$1.31M, 3.61% APY), targeting 10% liquidity in repo with the remainder in fixed-maturity buy-and-hold collateral strategies.

• Yield is generated from PT rolling strategies and repo rates, delivering a 10.69% 7-day APY and 12.39% instant APY, net of a 10% performance fee, with positions advised to be held for 30+ days to avoid NAV dilution from slippage.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.