- Basis, a startup from three Princeton graduates, wants to create a cryptocurrency of the same name.
- The company just raised $US133 million in a round backed by prominent firms including GV (formerly Google Ventures), Bain Capital Ventures, Lightspeed Venture Partners, Andreessen Horowitz, and Sky Capital.
- Basis says it’s creating a cryptocurrency with a stable, predictable value that can be used to make payments instead of being relegated to a method of speculation like bitcoin.
A cryptocurrency venture from three Princeton graduates has captured the attention of Silicon Valley.
On Wednesday, the New Jersey-based cryptocurrency startup Basis announced it had raised $US133 million in a round backed by venture-capital firms including GV (formerly Google Ventures), Bain Capital Ventures, Lightspeed Venture Partners, Andreessen Horowitz, and Sky Capital.
The team behind Basis says it is designing a “stable cryptocurrency” that will maintain a fixed value and thus be better suited for making purchases. That’s in contrast to bitcoin and other popular cryptocurrencies whose wild price swings make it undesirable as a day-to-day replacement for traditional money.
“The price volatility of cryptocurrencies is one of their biggest barriers to widespread adoption,” Nader Al Naji, the CEO and cofounder of Basis, wrote in a Medium post on Wednesday announcing the funding.
Al Naji says cryptocurrencies are now used almost exclusively as a means of speculation instead of as a way to buy things, so Basis aims to make a digital token backed by “an algorithmic central bank” that will simulate inflation and deflation to control the price, “just like a real currency.”
A company representative told Business Insider that Basis’s target market was in the developing world, where even traditional currencies can experience stretches of volatility. Basis believes people could eventually use its tokens even for things like salaries, loans, or contracts.
Basis was apparently courting venture interest as early as last year, when it was known as Basecoin. Reuters reported in October that the company, then only a few months old, had received funding from the New York-based Digital Currency Group to presell its token.
At the time, Al Naji hinted at the coin’s potential, telling Reuters his company had found “a way to keep the price stable while keeping all the other great features of cryptocurrencies.”
Basis isn’t the only cryptocurrency startup hoping to create a stable token that can be used to buy things – for example, the controversial cryptocurrency Tether intends to keep its price steady by basing its value on the US dollar.
But Basis believes its focus on the developing world will help make it a key part of the financial system.
“By providing anyone with an internet connection access to a stable and secure medium of exchange for the first time, we believe Basis can significantly increase the efficiency of the economies of developing nations,” Al Naji wrote.
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