(Bloomberg) -- Nick Van Eck, son of investment management veteran Jan Van Eck, is making a bet on cryptocurrencies with the help of his namesake family business.

The former partner at General Catalyst is entering the competitive realm of stablecoins, which seek to provide users a haven from volatility by pegging themselves to other assets such as the dollar. Agora, a startup co-founded by Van Eck, and crypto veterans Drake Evans and Joe McGrady, raised $12 million in a seed funding round, led by digital-asset venture firm Dragonfly. The equity round also included investments from the likes of General Catalyst and Robot Ventures. 

Agora’s parent company is incorporated in Delaware and its stablecoin issuer is based in the British Virgin Islands. The stablecoin will only be available to users outside the US. 

“Until there’s federal legislation for stablecoins in the US, we’re going to focus primarily on customers outside of the US,” the 27-year-old Van Eck, said in an interview.

Like other popular stablecoins, Agora’s USD stablecoins will be backed by cash, US Treasury bills and overnight repurchase agreements. VanEck will manage a fund for Agora’s reserves, said Kyle DaCruz, director of digital assets product at VanEck. 

“There is a need to have transparent and trustworthy institutions managing the assets of these digital dollars,” said DaCruz. “The exciting future of stablecoins is one in which audited and transparent stablecoin reserves are standard and we are looking forward to helping Agora build that future.”

Tether, the world’s most traded cryptocurrency, has dominated the stablecoin sector since its founding about a decade ago. The total market value of the second most popular stablecoin USDC, which is issued by Circle Internet Financial, stands at roughly $32 billion, compared with about $104 billion for Tether, according to data tracker CoinGecko. 

Van Eck said between Tether and USDC, there’s still room for a newcomer. Agora plans to focus on partnerships with crypto companies, including exchanges, instead of growing customers directly in different regions. Agora doesn’t plan to issue a governance token.

“Where stablecoins really moved the needle are places like Argentina, Southeast Asia, and so we’re heavily focused on being the best partner stablecoin to partners,” said Van Eck. “So those range from exchanges to custodians to dapps to trading firms.”

Agora plans to sign income-sharing contracts with partners. Individual holders of Agora don’t directly receive any yield or income made by Agora. Van Eck also criticized some projects in the stablecoin sector, especially after the blowup of algorithmic stablecoin TerraUSD.

Read more: Crypto Fans Lured by 20% Stablecoin Yields Even After 2022 Bust

“I think especially post what happened last cycle, we were losing the narrative and I want to build a company that I think brings this industry forward,” he said.

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