Why QED invested in Velocity

By Camila Vieira, Gbenga Ajayi and Ana Cristina Gadala-Maria

The global payments system is an essential part of financial infrastructure, but its core settlement layer has seen little innovation. Merchants, acquirers, startups and financial institutions must lock up significant capital in pre-funded accounts, leading to slow transactions, high costs, liquidity risks and fragmentation.

Stablecoins offer a unique way to improve settlement within the current payment system rather than replacing networks. Velocity is developing the infrastructure to support this transformation. We have watched this exact problem play out across the card ecosystem in our portfolio, from issuing to acquiring and settlement.

Velocity is building across all sides of the infrastructure shift, with a wedge in issuing, acquiring and settlement, and an approach that works with the networks rather than against them.

The problem is real and large

Trillions of dollars sit idle in correspondent bank accounts worldwide, earning minimal returns and moving slowly. Delayed settlements increase liquidity risk. Cross-border fees and FX spreads add hundreds of billions of dollars in annual costs for remittance companies, enterprises, fintechs and financial institutions.

Cross-border transactions are a significant share of card payment volume. The settlement orchestration layer can generate considerable revenue without high take rates. The enterprise treasury opportunity additionally expands the market. As companies hold more stablecoin balances, they encounter operational complexity, limited yield and reconciliation challenges.

Velocity aims to be the back-office layer for global commerce, enabling companies to move, manage and deploy stablecoin balances across markets.

The wedge matters

We were attracted to Velocity for its strong, distinctive approach. While most stablecoin infrastructure companies position themselves as alternatives to card networks, Velocity sees these networks as distribution channels.

Every dollar processed through Visa and Mastercard incurs a settlement cost, and we believe a significant share of settlement activity will shift to stablecoin rails over time. The inefficiency is structural: the networks authorize in far more currencies than they settle in, forcing acquirers and processors to lock up working capital in pre-funded accounts simply to bridge the gap.

That trapped capital is the wedge, and it is measurable in real dollars for every player in the flow. The company that becomes the preferred infrastructure layer for this transition stands to capture substantial value. Velocity’s partnership-oriented approach delivers real advantages: shorter sales cycles, better regulatory positioning, institutional trust and more durable distribution.

A strong ‘why now?’

Regulatory uncertainty made institutional buyers cautious about stablecoins. Banks and acquirers showed interest but hesitated to commit without a clear legal framework. Payment networks were also cautious. This is now changing rapidly.

The GENIUS Act in the United States has established a legislative framework for stablecoin issuance and settlement, removing a key barrier for banks, acquirers and payment processors. Regulatory progress in Europe under MiCA, along with momentum in the UAE and UK, is accelerating global adoption.

We are seeing this firsthand: banks are contacting us to chat about solutions, acquisitions are occurring and partnership announcements are increasing. After years on the sidelines, large institutions are now concerned about falling behind. The consolidation wave is the clearest signal of all: Stripe’s acquisition of Bridge and Mastercard’s acquisition of BVNK validate that this infrastructure layer is strategic, not speculative, and each deal reshapes the competitive map, in some cases opening partner slots inside the very networks Velocity is building alongside.

Multiple value propositions

Velocity’s goal is to be the leading back-office solution for enterprise stablecoin payments. To achieve this, the company must deliver across three connected layers: cross-border FX and on- and off-ramp infrastructure, network settlement and enterprise treasury.

The first layer enables enterprises, remittance firms, fintechs and crypto businesses to move money internationally faster, more efficiently and at lower cost, providing a firm foundation for growth. The second layer, network settlement, involves partnering with card networks and their ecosystems to embed Velocity’s infrastructure into card settlement flows. The third layer, enterprise treasury, helps CFOs and treasury teams manage balances, sweep funds, deploy capital, reconcile activity and simplify multi-currency cash management as stablecoin usage increases.

A company that connects fiat, cards, stablecoins, treasury workflows and network settlement will become a key partner for enterprise financial teams. We expect this segment to develop over the next 24 to 36 months. Once integrations are established across TMS, ERP, licensing, compliance and on-chain treasury tools, the competitive advantage will be significant.

Building all three layers is challenging, and it is exactly the kind of hard that builds a moat. This team has the operating pedigree to pull it off.

The team has done this before

Velocity is led by experienced payments operators with firsthand knowledge of the industry’s challenges. They understand the constraints, sales cycles, regulatory conditions and institutional relationships required for a network-driven go-to-market strategy. Eric Queathem spent nearly a decade at Worldpay, building and scaling global payments strategies across traditional and emerging market rails. This experience gave him direct relationships with the acquirers, financial institutions and card networks that Velocity now targets.

Velocity’s advisory network includes network operators, stablecoin infrastructure players, leading banks and fintech investors. This provides the company with credibility, commercial access and practical operating knowledge at a critical stage of its development.

QED has spent nearly two decades building one of the world’s most extensive fintech portfolios. We work with card networks, acquirers, regulators, financial institutions and fintech companies in every major region.

We know this problem both as investors and as operators. We have backed this thesis before: our portfolio companies on the issuing and pre-funded side of the card ecosystem have shown us, in real numbers, how much capital and margin the current settlement model destroys, and how powerful it is when a strong team removes that friction.

Velocity is the acquiring and settlement expression of a pattern we recognize and have real conviction in. We have worked with CFOs whose working capital is locked in accounts across multiple currencies. We have seen portfolio companies lose margin on international transactions due to uncontrollable FX spreads. Treasury teams regularly rely on spreadsheets and manual reconciliation because suitable tools are lacking.

This problem is not hypothetical; it is costly and very real across regions. We continue to track all major stablecoin players and are convinced that distribution and infra hooks will create more durable value than having another marginally better FX routing player/on/off-ramp in the space.

Most importantly, team, team, team. We sought a team capable of operating across legacy, current and future payments infrastructure. A team that understands incumbent payment systems, possesses the technical expertise to build on stablecoin rails, and has the commercial experience to engage enterprises and networks that control transaction volume.

We believe Velocity is that team. We are proud to partner with Velocity as it builds the settlement infrastructure layer for the next generation of global commerce. If it executes, Velocity will not just sit on top of the networks; it will become settlement infrastructure in its own right, owning the rails money moves across. That is the outcome we are underwriting.

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