Franklin Templeton Leads $8M Bet on Interest-Bearing Stablecoin Startup

Other backers include major financial players like Susquehanna and Triton Capital, alongside crypto-focused investors such as Nomura’s Laser Digital and GSR.

This latest investment follows a previous $1.1 million community round on the crowdfunding platform Echo, launched by Jordan “Cobie” Fish. Cap has also received early support from well-known crypto figures, including members of the “MegaETH Mafia” and industry insiders like Spencer Noon and Bryan Pellegrino.

Cap’s core protocol will operate through EigenLayer, a shared security marketplace designed to optimize the use of staked assets across multiple applications. While Ethereum will serve as the primary settlement layer, Cap plans to focus on MegaETH, a new Layer 2 network designed as an alternative to traditional rollup models.

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The startup’s stablecoin, cUSD, is generated by depositing USDC or USDT. Users can then stake cUSD to earn yield, while institutions borrow it to execute profit-driven strategies. To maintain security, restakers contribute locked ETH, earning premiums in return. Cap takes a 10% cut of the yield, with interest rates adjusted according to market conditions. Borrowers must also purchase loan insurance to protect lenders against default.

Cap’s model aims to attract both traditional financial institutions and crypto-native entities, offering a unique way to generate returns while ensuring security through decentralized methods. However, the team acknowledges potential risks, including platform vulnerabilities and the chance of stablecoin depegging.

Interest-generating stablecoins are increasingly popular, but their growth may face obstacles from regulatory changes in the U.S. Lawmakers are considering restrictions on such assets, reflecting concerns over their integration into the financial system. Despite this, Cap is positioning itself at the forefront of the evolving real-world asset space.

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