Pricing Pressure Continues; Cryptio raises $45Mn, Mastercard Acquires BVNK

Fed continues to hold rates steady. Powell will stay as Fed Chair til successor confirmed. Pricing pressure continue. Custodia loses bid to have case reheard. Cryptio raises $45Mn. Fuse announces Series A. Mastercard acquires BVNK.

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Fed Continues to Hold Rates Steady

The Federal Reserve held rates steady at its meeting last week, as concern over the rising price of oil and its impact on the economy intensifies. Members of the FOMC voted 11-1 to keep rates between 3.5% and 3.75%. Fed Chair Powell described current interest rate policy as significantly closer to a level that neither encourages nor slows economic growth. Still, policymakers expect to cut rates at least once this year, per the Fed’s updated “dot plot.” Powell may be keeping his role as Chair for longer than expected. Although his term expires on May 15th, Sen. Thom Tillis has vowed to block progress on Fed Chair nominee Kevin Warsh, until the administration resolves the Department of Justice investigation of Powell. Powell has said he would stay in the role as Chair until a successor is confirmed.

Regardless of who is leading the Fed, pricing pressures continue, with the U.S. producer price index increasing 0.7% in February, and the employment market shedding 92,000 jobs last month.

Custodia Loses

Custodia, a Wyoming-chartered special depository institution focused on digital assets, has lost its bid to have its case re-heard in front of the entire Tenth Circuit Court of Appeals. Custodia has long sought access to a Fed master account. The case stems from the Fed’s decision not to grant Custodia such access. Custodia argued in its case that, under the Monetary Control Act, the Fed is required to provide services to state-chartered banks like Custodia. But, courts have repeatedly sided with the Fed, ruling that the central bank enjoys broad latitude in deciding applications for Fed master accounts. The decision comes against the backdrop of Kraken, also focused on digital assets, winning access to what many are referring to as a “skinny” Fed master account.

Cryptio Raises $45Mn

Cryptio, a crypto accounting platform, announced it has raised a $45Mn Series B. The round was co-led by Sentinel Global and BlackFin Capital. Blueyard Capital, Alven, Cathay Innovation, and 1kx also participated in the round. The new round brings Cryptio’s total fundraising to date to $71.2Mn. Cryptio aims to continue building on top of its “data layer,” including by providing accounting, reconciliation, tokenization compliance, and financial reporting.

Fuse Announces Series A

AI-native loan origination system Fuse announced it has raised a $25Mn Series A. The funding round included participation from Commerce Ventures, FJ Labs, Clocktower Ventures, Footwork, Primary Venture Partners, and NextView Ventures. Fuse originally began as a consumer auto lender, before pivoting to build technology to automate loan origination. Fuse boasts more than 100 customers of its platform, including names like Canopy Credit Union and Navigant Credit Union. The company says it plans to use the new funding to continue building “the AI-native loan origination system and account opening platform that credit unions actually deserve.”

Mastercard Acquires BVNK

Mastercard is acquiring stablecoin infrastructure platform BVNK, the companies announced last week. The deal values BVNK at as much as $1.8Bn, including $300Mn in contingent payments. Mastercard’s announcement pointed to “increased regulatory clarity on digital currencies in multiple geographies,” including the U.S., with the passage of the GENIUS Act last year and the potential for wider crypto market structure legislation, CLARITY, to advance this year. Mastercard chief product officer Jorn Lambert commented on the acquisition, saying, “We expect that most financial institutions and fintechs will in time provide digital currency services, be it with stablecoins or tokenized deposits. We want to support them and their customers with a best in class, highly compliant, interoperable offering that brings the benefits of tokenized money to the real world.”