Paradigm makes its first investment in Brazil! $13.5 million bet on stablecoin Crown with a $90 million valuation

Top crypto venture capital firm Paradigm has announced a $13.5 million investment in the Series A round of Brazilian stablecoin startup Crown, bringing the company’s valuation to $90 million. This marks Paradigm’s first investment in Brazil, signaling the entry of this leading VC—known for investing billions in blockchain startups—into the South American market, which is seen as having tremendous potential for digital asset adoption.

Brazil’s High Interest Rate Environment Creates Unique Stablecoin Advantages

Ricardo de Arruda, Paradigm’s Investment and Research Partner and a Brazilian native, said Crown’s early success in scaling was key to the VC firm’s decision to make its first Brazilian investment. “When you become the primary stablecoin for a currency, the liquidity network effects you build are very powerful. That’s why Tether and Circle have performed so well,” de Arruda told The Block. “That’s also why we expect Crown to perform so well, because Crown is already far ahead of any other Brazilian real stablecoin in terms of liquidity.”

Crown co-founder John Delaney noted that Brazil’s benchmark interest rate is as high as 15%, creating a unique opportunity for stablecoins. “Tether doesn’t pay any yield to any of its partners, and that’s worked very well for them,” Delaney told The Block. “In the Brazilian environment, it’s almost impossible for anyone to do that. So the primary purpose of the structure we built is to solve this problem.”

BRLV is currently open only to institutional clients, who benefit from Brazil’s high interest rate environment when holding BRLV. Crown earns yield from the government bonds it holds to back BRLV. According to Crown, BRLV subscriptions have already exceeded 360 million reais (about $66 million).

Institutional-Grade Security and Trillion-Real Decade Goal

Delaney, a New York lawyer who moved to Brazil about 15 years ago, became interested in crypto in the early 2010s. His co-founder Vinicius Correa has a technical background and previously worked at successful fintech company Nubank. Delaney stated that Crown’s second core advantage is offering “institutional-grade security,” since most stablecoin trading comes from institutions.

“We see very strong demand in the market for institutional investors to access Brazilian interest rates, similar to arbitrage trading. It’s like a variant of the Brazilian real that can directly provide interest,” Delaney said.

Brazil is the world’s fifth-largest crypto market, with more people investing in digital assets than in stocks. Crown expects both institutional and retail markets to grow exponentially. “Our north star is ambitious: to have one trillion reais of BRLV in circulation within ten years,” Delaney said. “We expect this to represent a single-digit percentage of Brazil’s money supply.”

Paradigm’s investment in Crown is not only a recognition of the potential of the Brazilian market but also a bet on the innovative stablecoin model in high-interest emerging markets.