- Vixichain raised $7M in funding.
- The private blockchain aims to connect banks to crypto.
- Banks have maintained a distance from Web3 thus far.
Banks and other financial institutions worldwide are interested in blockchain networks. Despite this, they face significant barriers to actually using this technology. Privacy and regulatory constraints make banks reluctant to use public blockchains.
Sponsored
One company working to fix this issue is Vixichain. Recently, this company raised $7 million in funding for its private blockchain. This network will enable banks to use blockchain technology securely while also getting access to decentralized finance (DeFi).
Vixichain Raises $7M for Compliance-Focused Blockchain
Banking institutions have come one step closer to adopting blockchain tech. On Friday, October 25, Vixichain raised $7 million in a private funding initiative for its private blockchain for banks. The network will enable banks to serve as validators and offer them a secure on-ramp to DeFi.
This latest fundraising is part of Vixichain’s goal of raising $11 million by the end of the year. The money will go towards research and development, finding banking partners, and preparing for the mainnet launch.
Vixichain’s blockchain is focused on compliance. It offers built-in Anti-Money Laundering (AML) and Know-Your-Transaction (KYT) protocols and privacy-preserving features. The blockchain secures transactions through an advanced and fiat-backed NFT stablecoin (NUSD). This stablecoin will enable banks to interact with DeFi without compromising user privacy.
Why Banks Need a Private Blockchain
Blockchain networks are typically public ledgers that reveal all transactions. This makes transactions pseudonymous but not private. While this offers a significant degree of transparency, it also introduces risks to privacy.
Authorities, investigators, and analytics firms can connect the pseudonymous wallets with their users. For instance, the analytics firm Nansen specializes in labeling wallet addresses with the suspected names of their users. While Vixichain does not claim to provide a foolproof solution against probing by authorities, it emphasizes built-in protocols designed to preserve the privacy of financial and user data, all while ensuring compliance with regulatory bodies.
For banks, this introduces user privacy concerns and regulatory issues. As a private blockchain, Vixichain enables banks to work as validators on the network and, therefore, retain data sovereignty. The nUSD stablecoin facilitates using digital stable currencies backed by fiat, allowing network participants to conduct business through traditional financial institutions. This includes enabling credit card payments and allowing users to make transactions as they would with traditional fiat money.
On the Flipside
Vixichain is not the only network with privacy features. In October, Chainlink released private transactions for its Cross-Chain Interoperability Protocol (CCIP). The update allows institutions to set privacy settings for each transaction.
A recent study showing that Ripple is in partnership with 80% of Japanese banks suggests the growing appeal of blockchain among banks.
Why This Matters
Traditional banks are increasingly aware of the benefits of blockchain technology. Vixichain removes a serious concern for these institutions, potentially bringing them into the ecosystem.
Read more about privacy in DeFi:
How Private Can DeFi Be?
Read more about memecoins:
How High Can the Memecoin Market Go? ArkStream Capital Forecasts
