Leading private fintech company Stripe has closed a deal to acquire Bridge, a newly established stablecoin network founded by former Coinbase and Square executives Zach Abrams and Sean Yu. The deal, reportedly valued at around $1.1 billion, the largest acquisition in the history of the crypto industry and the largest for Stripe to date.
It looks like Stripe is bringing back its support for crypto payments with the new buy.
The deal finalization was first reported by TechCrunch founder Michael Arrington on X (formerly known as Twitter) with no additional details. Both Stripe and Bridge have yet to officially confirm the acquisition at the time of reporting.
Is The Deal Done?
Last week, Stripe was said to be in “advanced talks” to buy Bridge. At the time, reports noted that the parties did not reach an agreement just yet and might not proceed with the deal.
While no additional information has yet to be revealed, it appears that the latest acquisition is part of Stripe’s broad strategy to expand its footprint in the cryptocurrency markets, particularly the stablecoin sector.
The company has recently initiated support for stablecoin transactions, specifically Circle’s USDC and Pax Dollar, across the Ethereum, Solana, and Polygon networks. The integration enables Stripe customers across 70 countries to pay using stablecoins.
Launched last year, Bridge’s mission is to build a global payment infrastructure powered by stablecoins to facilitate fast and cheap cross-border transactions. The company has raised $58 million in funding from prominent investors like Sequoia Capital, Ribbit Capital, and Index Ventures.
A Wider Market
Bridge’s client base is also somewhat remarkable, including key names like Coinbase and SpaceX. SpaceX embraces Bridge for managing payments across different jurisdictions, while Coinbase uses its solutions for facilitating transfers between various stablecoins on its platform.
It’s unclear whether Stripe will pursue a stablecoin launch like its competitor PayPal, but the firm’’s interest in the sector is clear. PayPal launched PayPal USD (PYUSD) last year and it has surpassed a $1 billion market cap as of October 21.
Apart from Stripe and PayPal, competing payments giants like Visa, Robinhood, and Revolut, are also exploring opportunities in the lucrative stablecoin market.
Bloomberg reports that Robinhood and Revolut were considering launching their own stablecoin to diversify their product offerings. However, Robinhood already confirmed the company had no imminent plans to launch its stablecoin.
Still, Robinhood’s ongoing efforts to enhance its crypto services suggest that they could explore stablecoins as part of their product offerings to facilitate transactions and improve liquidity for users.
Visa has been working on developing infrastructure that allows for seamless transactions using stablecoins. The company seeks to enhance the payment experience for both consumers and merchants.
Stripe’s Second Bet on Crypto
As one of the leading payments services, Stripe is quick to capture market changes and movements. The company was indeed among the pioneering companies to adopt Bitcoin.
Stripe first offered Bitcoin payment processing in 2014, but it decided to end support for Bitcoin in April 2018. At the time, the company said Bitcoin failed to become an effective means of exchange due to delays in processing payments amid growing popularity.
Plus, the fees associated with Bitcoin transactions rose dramatically, often reaching amounts comparable to bank wire fees. Stripe chose to stay away from offering Bitcoin payments as the high fees made it less appealing for both businesses and consumers.
But recent initiatives show that Stripe is making a strong comeback to the cryptocurrency market. Its second bet seems to be on stablecoin now.
There is an increase in demand from its global users for accepting stablecoin payments. Many businesses have started to adopt or to consider embracing stablecoins.
Stripe has formed partnerships with many crypto platforms, such as Blockchain.com and Coinbase, to improve fiat-to-crypto onramps and enhance user experiences. These collaborations aim to simplify the process of exchanging fiat for cryptocurrencies, thereby increasing adoption among new users.
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