Andreessen Horowitz, widely known as a16z, is investing in a nascent startup named ZAR. This company's objective is to introduce dollar-based digital money to the general population of Pakistan. The proposed system bypasses traditional banks, enabling individuals to acquire stablecoins through local retail establishments that they already patronize and trust.
Funding and Investment
A report from Bloomberg indicates that ZAR has successfully secured $12.9 million in a recent funding round. This brings the startup's total funding to approximately $20 million since its inception. Prominent investors such as Dragonfly Capital, VanEck Ventures, Coinbase Ventures, and Endeavor Catalyst also participated in this latest funding round.
ZAR's Service Model
ZAR is developing a service that facilitates the exchange of physical cash for digital dollars at neighborhood retail locations. These local corner stores, mobile phone kiosks, and small financial agents will function as the primary access points for users. Customers can visit these shops, scan a QR code, and then hand over cash to receive digital currency directly into a mobile wallet. This wallet is then linked to a Visa card, allowing users to spend the digital funds in a manner comparable to conventional payment methods.
Significance for Pakistan
This innovative model is specifically designed for individuals who predominantly use cash for transactions and do not have access to formal banking services. Pakistan is home to one of the largest unbanked populations globally, and a significant portion of its residents already rely on small shops for their daily financial needs. ZAR intends to leverage these existing retail networks as an accessible and low-friction entry point into the digital payment ecosystem.
Regulatory Landscape
The introduction of ZAR's service coincides with Pakistan's efforts to establish clearer regulations for cryptocurrency usage. Under the newly enacted Virtual Assets Ordinance, the government has established the Pakistan Virtual Assets Regulatory Authority (PVARA). This authority is tasked with licensing and overseeing crypto-related businesses operating within the country.
PVARA holds the responsibility for ensuring compliance with regulations and setting fundamental standards to guarantee that these services operate within a defined and regulated framework. Furthermore, Pakistan has initiated its inaugural licensing process for cryptocurrency firms, inviting regulated exchanges and service providers to apply for operational permits within the nation.
Future Expansion and Founder Background
Following a successful pilot program in Pakistan, ZAR has plans to expand its operations into various African countries, beginning in 2026. The company was co-founded by Sebastian Scholl and Brandon Timinsky. Prior to establishing ZAR, they were instrumental in the sale of their digital wallet startup, SadaPay, to Turkey's Papara in 2024.