Emtech, an African provider of central banking infrastructure, recently introduced its CBDC Innovation Kit, which aims to facilitate experimentation with digital currencies pioneered by central banks.
The New York-based company has now announced a $4 million seed investment, led by Matrix Partners India, to further develop its CBDC stack and regtech solution.
Other investors in this round include BTN.vc, VestedWorld, Equity Alliance, LoftyInc Capital, Level Up Ventures, and Collide Capital, joining Emtech’s existing investors such as Noemis Ventures, Octerra Capital, and 500 Global.
This investment brings Emtech’s total funding to $10 million, including a $4 million pre-seed round last year and a recent $2 million extension.
Emtech unveiled its CBDC Innovation Kit in July, aligning with its founder’s previous statement that a CBDC platform would be deployed this year.
The company’s digital regulatory platform, which includes the innovator’s center and regulatory sandbox, assists fintechs in preparing for regulatory compliance and testing their innovations.
Emtech has been working with six central banks, including Ghana, Nigeria, and the Bahamas, to develop regtech and CBDC stack solutions.
Additionally, the company collaborates with fintechs in various countries, providing regulatory and innovation insights.
CEO Carmelle Cadet emphasized that Emtech is the only company globally working with multiple central banks simultaneously.
The seed round was necessary to support these partnerships, especially amid the challenges of securing funding during the economic downturn.
Emtech also signed a collaboration deal with the West Africa Monetary Institute, which aims to establish a joint central bank and introduce a single currency for the region.
CBDCs have gained traction globally as central banks explore digital currency options to address the decline in cash usage and maintain control over digital payments.
A BIS survey indicates that 93% of banks are engaged in CBDC projects, and 24 central banks plan to have digital currencies in circulation by the end of the decade.
While Nigeria has launched a digital retail currency called the eNaira, its acceptance has been disappointing.
However, Cadet believes that the eNaira’s challenges should not overshadow the potential of CBDCs. Emtech’s CBDC Innovation Kit aims to provide a fintech-friendly alternative, allowing fintechs to access a digital cash infrastructure and simulate transactions and new business models.
Emtech’s simulated token, “Beyond Cash (BYDC),” leverages the Hedera Hashgraph and ERC-20 standard for tokenization.
The company’s goal is to bridge the gap between fintech innovation and central banking oversight, enabling central banks to deploy CBDCs as secure digital cash infrastructure.
Emtech has around 200 fintech companies on its waitlist, eager to work on the platform.
Aakash Kumar, Principal at Matrix Partners India, believes that regulated CBDCs and programmable currency have the potential to enhance financial inclusion in Africa.
The investment by Matrix Partners India reflects their enthusiasm for Emtech’s vision of shaping fintech infrastructure for CBDCs and fintech regulation solutions.
Source: Techcrunch
