As global interest in digital assets surges, the stablecoin market has emerged as one of the most dynamic and resilient corners of the crypto market. Just this month, Codex, a startup building a new blockchain purpose-built for stablecoins, secured $15.8 million in seed funding, led by Dragonfly Capital and with backing from prominent names like Coinbase Ventures and Circle.
This investment signals increasing institutional confidence in the future of stablecoins as mainstream financial tools rather than speculative assets. Despite a broader 25% crypto market downturn in Q1 2025, the stablecoin market added $40 billion in value, bringing the total market cap to an estimated $230 billion.
According to Shreenath Iyer, Chief Marketing Officer at D24 Fintech Group, Codex is a promising project to watch due to their technical focus on addressing stablecoin-specific inefficiencies, but their success will depend on execution and overcoming the many technical challenges that come with building a specialised stablecoin infrastructure.
Iyer says: “Stablecoins, as Codex’s investment has shown, are growing in credibility. This year, we have seen several developments in support of the market, like Stripe’s Bridge acquisition for $1.1 billion to support stablecoin-based payments, and the GENIUS Act established clear regulatory frameworks for stablecoins.
“As a new player, Codex’s approach recognizes that general-purpose blockchains often fall short for stablecoin operations due to unpredictable fees and inefficiencies. To address these issues, they are developing a Layer-2 solution built on the Optimism Stack that is designed to enhance the usability and efficiency of existing stablecoins in the market, like USDT and USDC. The platform aims to improve the overall experience of using and transferring stablecoins, ensuring businesses can rely on fixed transaction fees, avoiding volatility during network congestion.
“Yet, execution remains the key challenge. Codex is entering a competitive space with emerging players like Plasma, which raised $24 million in February and uses a zero-fee Bitcoin sidechain model, and established competitors like Ethereum (USDC, USDe) and Tron-based (USDT) stablecoins. The startup is also targeting Southeast Asia, where stablecoins address region-specific business challenges. These issues range from thin profit margins inflating traditional cross-border payment fees, to businesses facing high fees and slow processing for international transactions, which they must tackle while also effectively navigating the complex regulatory landscape in Southeast Asia.
“The stablecoin space is becoming increasingly crowded, and while Codex has an interesting pitch, its execution in the coming months will be critical to determining where they sit in the market. The ability to build reliable off-ramps, secure regulatory buy-in, and deliver consistent performance will determine whether Codex becomes a leading player in purpose-built blockchain solutions or just another footnote in the fast-evolving stablecoin race,” concluded Iyer.
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