Nick van Eck, the son of renowned investment management expert Jan van Eck, is preparing to launch a new stablecoin backed by the United States dollar. This comes after Agora, the company co-founded by van Eck, closed a $12 million funding round. The stablecoin, called Agora digital dollar (AUSD), will be fully supported by cash, U.S. Treasury bills, and overnight repo agreements. VanEck, a $90 billion asset management firm where Jan van Eck serves as CEO, will manage a fund for Agora’s reserves. The aim is to have transparent and trustworthy institutions managing the assets of these digital dollars. Agora’s CEO will be Nick van Eck himself.
The $12 million seed funding round was led by Dragonfly, a digital asset venture capital firm. Other investors included Robot Ventures, Wintermute, Breed, and General Catalyst, where van Eck previously worked. Drake Evans, previously head of lending at decentralized finance firm Frax Finance, and Joe McGrady, former director of operations at digital asset management firm Galaxy Digital, joined forces with van Eck in October to build Agora.
Agora’s parent company is incorporated in Delaware, while its stablecoin issuer is based in the British Virgin Islands. Initially, the stablecoin will only be available in select markets outside the United States. Van Eck explained that until there is federal legislation for stablecoins in the U.S., the focus will primarily be on customers outside of the country. Agora expects places like Argentina and Southeast Asia to benefit the most from a digital dollar.
Agora will be entering a competitive stablecoin market dominated by Tether (USDT) and Circle (USDC), which have market caps of $104.3 billion and $32.5 billion respectively, according to CoinGecko. However, van Eck believes there is still room for a newcomer. Agora’s strategy will involve establishing strong partnerships with various industry players, including cryptocurrency exchanges, custodians, decentralized applications, and trading firms.
Van Eck clarified that holders of AUSD will not receive income like the holders of TerraClassicUSD (USTC) did before it collapsed in May 2022. Agora has not yet responded to a request for comment.