Sending money across borders like from the United States or Europe to Africa and Asia is usually slow and expensive. Traditional banks take days to process transfers and charge high fees.
To fix this, a fintech company named NALA has been using a new kind of technology called stablecoins to move money instantly. Now, NALA has just secured a massive $50 million credit line (a big loan facility) to make its payment network even larger and faster.
Before understanding what NALA is doing, it helps to know what a stablecoin is.
• Unlike normal cryptocurrencies (like Bitcoin) whose prices go up and down like a roller coaster, a stablecoin is tied to a real currency, usually the US Dollar.
• One stablecoin is always worth exactly one US dollar.
Because they live on the internet, stablecoins can be sent from one country to another in just seconds, 24 hours a day, without waiting for standard banking hours.
Why NALA Needed the $50 Million
NALA’s business has been growing incredibly fast. In fact, the company’s CEO, Benjamin Fernandes, mentioned that their business was doubling so quickly that “everything broke” because they didn’t have enough cash on hand to handle all the transactions.
When you send money through an app, the company usually has to “pre-fund” the transfer. This means NALA must put its own money into a local bank account in the destination country so the person receiving the money can get it immediately, even before the international bank finishes moving the original cash.
The Solution: This new $50 million funding gives NALA the cash it needs to pre-fund these accounts. This means they can handle much larger money transfers for big businesses without running out of cash.
How Does NALA’s System Work?
NALA connects global businesses and everyday people through its system. It currently links to over 249 banks and 26 mobile money services across 16 countries.
Through its business platform, called Rafiki, NALA allows international companies to collect US dollars from customers worldwide, convert those funds into stablecoins, and then drop them directly into local African or Asian bank accounts or mobile wallets as local currency within minutes.
This $50 million deal is unique because it is a credit line (debt) rather than selling pieces of the company (equity). Because NALA still has plenty of money left from its previous funding rounds, this new cash will be used entirely as “working capital” to speed up operations.
By using stablecoins as the invisible pipes behind the scenes, NALA is proving that international business doesn’t have to be slowed down by old banking systems.
