Stripe has made another substantial investment in crypto, buying stablecoin platform Bridge in a reported $1.1 billion deal.
After speculation about the acquisition swirled last week, TechCrunch founder Michael Arrington recently confirmed that the deal was finalized. The Bridge acquisition will be the largest purchase Stripe has made to date and one of the largest acquisitions the still-nascent crypto industry has witnessed.
“This proves again our strong stance that stablecoins will continue to proliferate in areas like access, usage, applications, global reach, and regulatory developments,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “Stripe provides payment services to roughly 1% of global gross domestic product, so stablecoins will be an efficient payment option that helps them grow their client base and payment volumes around the globe. “
Worldwide Support
Stripe has attempted to incorporate crypto into its popular platform since it added bitcoin as a payment option a decade ago. However, the company was forced to discontinue bitcoin support because of high costs and processing bottlenecks.
However, the company recently announced that it was working with Coinbase to bring stablecoin support to its platform. Stripe now supports Circle’s USDC on the Ethereum, Solana and Polygon blockchains and Pax Dollar on Ethereum and Solana. On its first day of stablecoin support, Stripe processed transactions in 70 countries.
Stablecoin Ambitions
However, the Bridge deal hints that Stripe has ambitions beyond simply supporting stablecoin transactions. Bridge is a payments network that was founded two years ago by former Coinbase executives. The platform gives businesses the capabilities to create, store, send, and receive stablecoins.
In fact, Bridge has been called the web3 version of Stripe, and the startup has received $58 million in funding from some of the industry’s biggest names. However, the crypto company has not yet been valued anywhere close to the $1.1 billion Stripe will reportedly pay.
Still, stablecoins are one of the key payments innovations that have emerged in recent years. Stablecoins track a fiat currency, like the U.S. dollar, on a one-to-one basis, and they have often been touted as a potential solution for cross-border payments. Tether’s USDT is currently the leading stablecoin, with USDC in distant second place.
However, payments giant PayPal recently and successfully issued its own stablecoin, PayPal USD (PYUSD). It’s unclear if Stripe plans to follow suit after the Bridge acquisition.