On Tuesday, U.S. international wire transfer startup Wyre announced a strategic partnership with MakerDAO. We’ve written about Wyre several times in the past: first when they raised a $5.8 million Series A led by Chinese firm Amphora Capital. The firm went on to acquire Bejing-based Remsity as they took on China. At the time — April 2017 — we reported that they were processing $50 million a month, but Mr. Dunworth had predicted transactions would scale up to $70-75 million per month in the aftermath of the acquisition.
The agreement with MakerDAO will allow instantaneous movement of “fiat currency directly into and out of Dai”. Dai is a stablecoin governed by Maker (of the MakerDAO project). So the implication here is users will be able to transfer international currencies directly into Dai. This was actually something that was discussed in an abstract in a recent interview we did with MakerDAO CEO Rune Christensen.
In the interview, we briefly discussed what Wyre was and how it came about. It turns out Michael and his co-founder were originally working on a company called snapCard that allowed users to buy items on multiple sites with a unified checkout process. The site went on to accept bitcoin and experienced rapid growth, but recognized the opportunity to build a product around international wire transfers since it was something they were doing for international customers anyway.
We went on to discuss the implications of the partnership and Wyre’s relationship with MakerDAO, which appears to have been going on for a long time with Wyre as an investor in the project. The use case for Dai in Wyre was laid out as such: normally wire transfers Wyre gets from clients (who are using Wyre to maintain liquidity through over the counter transactions) take 48 hours. With Dai, they can be instant. This benefits Wyre because it dramatically reduces their capital outlay; it benefits the client since they get quicker access to the liquidity that Wyre requires. It also dramatically reduces the potential for phishing created by traditional wire transfers, something which costs Americans an estimated $500 million per year.
Overall, this partnership is a huge step forward for stablecoins as a whole, and MakerDAO especially. Wyre has become a major player in the international wire transfer business and if they are able to grow alongside the cryptocurrency market they will gain a huge advantage over the competition.
The timing couldn’t be better for MakerDAO as speculation around controversial stablecoin Tether continues to heat up, with the company’s latest issuance of another $50 million worth of USDT. As we discussed in our interview with MakerDAO, Tether’s opponents have some very real points that a recent audit hasn’t entirely alleviated. Either way, analysts will be watching MakerDAO’s price closely in the coming weeks and months.
Note: This interview is part of the CCN.com Podcast. The podcast and this interview are also available on iTunes, TuneIn, Stitcher, Google Play Music, Spotify, Soundcloud, Youtube or wherever you get your podcasts.
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Last modified: June 11, 2020 1:46 PM UTC