Babylon Labs raises $15 million from a16z crypto to develop Bitcoin collateral infrastructure

Finance Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Babylon Labs raises $15 million from a16z crypto to develop Bitcoin collateral infrastructure Funding will be used to build and scale Babylon Trustless BTCVaults, enabling native bitcoin to be used as on-chain collateral without custodians or wrapping. By Will Canny , AI Boost | Edited by Stephen Alpher Jan 7, 2026, 1:43 p.m. Make us preferred on Google Babylon raises $15 million from a16z Crypto to develop Bitcoin collateral infrastructure. (Unsplash, modified by CoinDesk) What to know : Babylon Labs has raised $15 million from a16z crypto, which purchased that amount of the platform’s BABY token. The capital will fund the development and scaling of Babylon Trustless BTCVaults. BABY surged 13% on the news. Babylon Labs has raised $15 million in funding from a16z crypto to support the development and scaling of Babylon Trustless BTCVaults, an infrastructure system designed to allow native bitcoin to be used as collateral across onchain financial applications, the company said in a blog post Wednesday. The platform's BABY token was higher by 13% after the a16z investment. STORY CONTINUES BELOW Don't miss another story. Subscribe to the Crypto Daybook Americas Newsletter today . See all newsletters Sign me up By signing up, you will receive emails about CoinDesk products and you agree to our terms of use and privacy policy . The investment will be used to advance the core technology behind BTCVaults and support integration with external applications that require verifiable, non-custodial bitcoin collateral, the company said. a16z crypto will also provide strategic input based on its experience investing in blockchain infrastructure. BTCVaults are designed to allow bitcoin to be locked on the Bitcoin base layer while remaining verifiable to external systems. The system is intended to allow applications to confirm that BTC collateral remains in place and to enforce conditions such as unlocking or liquidation through cryptographic mechanisms, rather than custodial control or wrapped representations of the cryptocurrency. Most existing on-chain Bitcoin collateral solutions rely on custodians or wrapped BTC, which require users to relinquish control of their assets or convert the cryptocurrency into a different representation. Babylon’s approach is designed to enable BTC to remain native to the Bitcoin network while still being utilized in financial applications. The development of BTCVaults comes amid growing institutional use of bitcoin as collateral. Regulators, banks, asset managers, and trading firms have increasingly recognized BTC in lending, derivatives, and investment products, while the majority of the crypto's supply remains unused in onchain financial systems. BTCVaults are designed to support a range of financial use cases, including borrowing, lending, and other collateralized products, without requiring custodians or asset wrapping, Babylon said. The infrastructure is intended to be compatible with both decentralized and traditional financial systems. The funding will support Babylon's goal of enabling BTC to function as productive collateral while preserving self-custody and operation on the Bitcoin base layer. Read more: Ostium Raises $20M Series A Led by General Catalyst, Jump Crypto to Put TradFi Perps Onchain Babylon A16z crypto Fundraising AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards . For more information, see CoinDesk's full AI Policy . More For You KuCoin Hits Record Market Share as 2025 Volumes Outpace Crypto Market By CoinDesk Research Dec 22, 2025 Commissioned by KuCoin KuCoin captured a record share of centralised exchange volume in 2025, with more than $1.25tn traded as its volumes grew faster than the wider crypto market. What to know : KuCoin recorded over $1.25 trillion in total trading volume in 2025 , equivalent to an average of roughly $114 billion per month , marking its strongest year on record. This performance translated into an all-time high share of centralised exchange volume , as KuCoin’s activity expanded faster than aggregate CEX volumes , which slowed during periods of lower market volatility. Spot and derivatives volumes were evenly split , each exceeding $500 billion for the year, signalling broad-based usage rather than reliance on a single product line. Altcoins accounted for the majority of trading activity , reinforcing KuCoin’s role as a primary liquidity venue beyond BTC and ETH at a time when majors saw more muted turnover. Even as overall crypto volumes softened mid-year, KuCoin maintained elevated baseline activity , indicating structurally higher user engagement rather than short-lived volume spikes. View Full Report More For You Morgan Stanley files for ether trust after bitcoin and solana ETF push By Oliver Knight | Edited by Jamie Crawley 2 hours ago The Wall Street giant is widening its crypto push, following bitcoin and solana ETF filings with a potential ether trust. What to know : Morgan Stanley has filed a registration statement with the SEC for an Ethereum Trust. The filing comes days after the bank submitted paperwork for spot bitcoin and solana ETFs, as crypto ETFs have rapidly expanded in the U.S. over the past two years. Morgan Stanley began offering crypto access to clients in October through its wealth management arm, reflecting growing institutional adoption of digital assets. Read full story Latest Crypto News Strategy’s STRC perpetual preferred stock returns to $100, may trigger more bitcoin buying 1 hour ago Start-of-the-year recovery rally stalls: Crypto Daybook Americas 1 hour ago Nike sells its NFT and virtual sneakers amid lack of digital art market interest: report 1 hour ago Crypto Markets Today: Bitcoin slides as Asia-led sell-off hits altcoins 2 hours ago Morgan Stanley files for ether trust after bitcoin and solana ETF push 2 hours ago Bitcoin slides toward $91,000 with two CME pricing gaps coming into focus 2 hours ago Top Stories Morgan Stanley files for ether trust after bitcoin and solana ETF push 2 hours ago Crypto Markets Today: Bitcoin slides as Asia-led sell-off hits altcoins 2 hours ago XRP could outperform bitcoin as XRP/BTC chart shows rare Ichimoku breakout since 2018 8 hours ago Bitcoin miners chase AI demand as Nvidia says Rubin is already in production 8 hours ago Start-of-the-year recovery rally stalls: Crypto Daybook Americas 1 hour ago Crypto traders can now take leveraged bets on silver via Binance Futures 5 hours ago