Plasma raises $24M to launch zero-fee blockchain for Tether in Q2

Plasma just locked in $24 million to launch a blockchain built specifically for Tether. The new network, set to go live in the second quarter of 2025, promises zero-fee transactions and a streamlined system designed solely for stablecoins.

The funding round was led by Framework Ventures, with support from Bitfinex, billionaire investor Peter Thiel, and Tether CEO Paolo Ardoino.

Paul Faecks, Plasma’s co-founder, confirmed the funding in an interview on Thursday. He said the blockchain will remove unnecessary features that slow down transactions, making it the fastest way to move Tether across networks. “You’re just capable of making very different trade-offs if all you care about is how can we be the best product for stablecoins,” Faecks said.

Does Tether need a blockchain?

Right now, Tether controls 70% of all circulating supply in the stablecoin market. The company made $13.7 billion in profit last year, with its reserves surging past $7 billion for the first time in Q4 2024. Yet, despite its size, the stablecoin moves across multiple blockchains that were never built specifically for it.

So unlike general-purpose chains like Solana, Tron, and Polkadot, Plasma says it is removing everything except what’s necessary for stablecoins. There will be no NFTs, memecoins, or token airdrops. No governance features. No staking. The focus is, reportedly, on transactions—fast, scalable, and without fees.

Plasma runs on Bitcoin, but it doesn’t rely on Bitcoin’s network congestion or fees. The blockchain has its own consensus mechanism, a custom system that determines security, scalability, and transaction validation.

Plasma’s decision to build a blockchain exclusively for Tether comes as U.S. regulators push for stricter stablecoin oversight. Two bills—the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act in the House and the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act in the Senate—plan to introduce new compliance requirements.

If either bill passes, Tether will probably have to restructure its reserves. JPMorgan analysts say only 66% of Tether’s assets comply with the STABLE Act’s rules, while 83% meet the GENIUS Act’s requirements. Both figures have been declining as Tether’s supply grows. “The compliance ratio has declined since mid-2024 as stablecoin supply surged,” Nikolaos Panigirtzoglou, lead analyst at JPMorgan, wrote in a report.

Right now, Tether holds 83,758 BTC, worth more than $8 billion at today’s prices. The company first confirmed its Bitcoin reserves in 2023 and announced plans to allocate up to 15% of quarterly profits to Bitcoin purchases. If the STABLE or GENIUS Act passes, it may be forced to offload those holdings in favor of U.S. Treasuries and other liquid assets.

Tether’s latest attestation report showed a reserve buffer of over $7 billion at the end of 2024, its largest to date. The company reported $13 billion in profits for the year.

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