The Rise of Real-Time Payments
Real-time payments are becoming increasingly common for individuals and businesses, but there is still a significant gap in cross-border transactions. This is where Caliza comes in – an innovative startup founded in 2021 by American entrepreneur Ezra Kebrab with the goal of changing the way we transfer funds across borders.
The Problem with SWIFT
Currently, most international transfers are made via SWIFT (Society for Worldwide Interbank Financial Telecommunication), which can take days to settle. This delay can be costly for businesses, especially in Latin America where production often depends on timely payments. For example, a company doing nearshoring in Mexico may face significant delays if the upfront payment doesn’t clear in time.
Introducing Caliza
Caliza offers an alternative to SWIFT by providing an API and front-end payment system that use cryptocurrency stablecoins, specifically Circle’s reserve-backed USDC, and existing real-time payment networks. This allows for instant transfers and provides international merchants with U.S. digital dollar accounts.
Expansion into Latin America
While Caliza is currently based in the United States, its focus is on expanding into Latin America. The startup has plans to expand into Mexico in the fall, although this timeline has been pushed back a few months due to regulatory and compliance issues.
Why Brazil?
Brazil is an attractive market for Caliza due to its high adoption of digital payments. Its digital payments scheme, Pix, has become ubiquitous, with even coconut vendors accepting it. This high level of adoption suggests that Brazilians are already comfortable using digital payment methods, making it an ideal location for Caliza to launch.
The Role of Cryptocurrency Stablecoins
Caliza’s use of cryptocurrency stablecoins addresses the issue of currency volatility in Latin America. The Brazilian real has weakened significantly against the U.S. dollar this year, and Caliza aims to provide a more stable alternative.
Empowering Everyone, Everywhere
Caliza’s mission is to "empower everyone, regardless of their location or circumstances, to access instant and stable liquidity." This suggests that the startup’s long-term goal is not just to serve Latin America but also other regions, including Africa. Given Kebrab’s Ethiopian and Eritrean heritage, it’s likely that Caliza will expand into these markets in the future.
Funding and Partnerships
Caliza recently raised $8.5 million in funding led by Initialized, with participation from several other notable investors, including Abstract Ventures and Digital Currency Group. This new round of funding brings the total amount raised to date to $13.8 million.
Regulatory Compliance
While Caliza has faced delays due to regulatory issues, it’s clear that the startup is committed to meeting all necessary standards. Kebrab mentioned that getting licenses was a key part of this process.
Conclusion
Caliza is poised to revolutionize cross-border transactions in Latin America and beyond. By leveraging cryptocurrency stablecoins and existing real-time payment networks, the startup offers a faster, more reliable alternative to SWIFT. With its focus on regulatory compliance and expansion into new markets, Caliza is well-positioned for success.
Key Takeaways
- Real-time payments are becoming increasingly common, but cross-border transactions still face significant challenges.
- Caliza offers an innovative solution by using cryptocurrency stablecoins and existing real-time payment networks.
- The startup’s focus on regulatory compliance ensures that it meets all necessary standards.
- Expansion into Latin America is a key priority for Caliza, with Mexico being the next target market.
Future Developments
As Caliza continues to grow and expand, it will be interesting to see how the startup addresses new challenges and opportunities. With its commitment to regulatory compliance and innovative use of technology, Caliza is well-positioned to become a leader in cross-border transactions.
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