MENA-focused fintech Sovra raised over USD 2 mn in pre-seed funding to build a digital USD (USDC) wallet, according to a press release (pdf). Pharsalus Capital led the round, joined by regional angel investors including Ramp founder Karim Atiyeh, Lean Technologies founder Hisham Al Falih, 21Shares founder Hany Rashwan, and Orascom Development Holding AG Chairman Naguib Samih Sawiris.
A bank account without the bank: Instead of relying on traditional banks, Sovra uses USDC — the regulated stablecoin issued by Circle, the NYSE-listed, SEC-regulated, Deloitte-audited company. The platform is built so that users hold their own private security keys, meaning funds remain accessible without interference from the platform or intermediaries. Users can transfer funds instantly, earn interest, and spend their balances using an attached Visa or Mastercard.
A lifeboat for fragile economies: Inspired by Lebanon’s 2019 financial crisis, which saw bank deposits and accounts frozen, the platform aims to be available across 180 countries from day one, founder and CEO Ahmad Wehbi tells EnterpriseAM. “Our focus is the parts of MENA where local currencies are unstable, local systems are fragile, and most people are unbanked or underbanked,” he explains. Sovra is targeting a 3Q launch and plans to eventually integrate AED-denominated stablecoins as it grows into new markets, he adds.
BUT- While this business model gives consumers a much-needed lifeline, it’s also keeping emerging market central bankers up at night. Global watchdogs from the IMF and the Bank for International Settlements have recently sounded the alarm over this exact type of digital dollarization, warning that the widespread use of stablecoins allows citizens to bypass local banking systems entirely and strips governments of their ability to control their own monetary policy.