Stripe's potential acquisition could boost its stablecoin operations.
Key Takeaways
- Stripe is in advanced discussions to acquire Bridge, a platform specializing in stablecoin transactions.
- The deal could significantly enhance Stripe's capabilities in the stablecoin sector.
Stripe, the privately-owned payments giant, is in discussion to seal a deal to acquire Bridge, a stablecoin payment platform founded by Coinbase alumnus Sean Yu, Bloomberg reported Wednesday.
Sources familiar with the matter indicate that discussions are in advanced stages, though no agreement has been finalized. Both parties might still withdraw from the negotiations.
Bridge, based in San Antonio, Texas, specializes in enabling businesses to manage stablecoins like USDT and USDC. It aims to build a payment network that challenges traditional systems.
Bridge’s list of clients and partners includes some high-profile names such as SpaceX, Stellar, and Stripe. The company recently secured $58 million in funding from prominent investors, including Sequoia, Ribbit, and Index.
If finalized, the acquisition could enhance Stripe’s recent re-entry into the stablecoin payment sector.
The company made a comeback to the crypto market in 2022, starting to enable USDC payouts on Polygon, with Twitter as its initial customer. Earlier this year, it greenlit USDC stablecoin payments on the Solana, Ethereum, and Polygon networks.
Stripe has recently joined Paxos’ stablecoin network, becoming the first payment service provider (PSP) to integrate Paxos’ new enterprise-grade infrastructure into its system.
Growing interest in the stablecoin market
The stablecoin market has come under increasing regulatory scrutiny since the collapse of TerraUSD in 2022. Still, it keeps growing as one of the most promising areas for fintech players to exploit.
The financial success of existing stablecoin issuers, like Tether, is one of the key motivators. Tether saw its profit soar to $5.2 billion in the first half of 2024. Beyond profit potential, stablecoins are increasingly being used for savings and payments in various markets.
Tether and Circle are currently taking the majority of market shares, but they will soon face heated competition as major firms like Robinhood and Visa have revealed plans to launch their stablecoins. Ripple Labs, a major blockchain player, is also expected to officially roll out its RLUSD stablecoin by the end of this year.
On the regulatory front, the impending implementation of regulations, such as the European Union’s Markets in Crypto-Assets (MiCA) framework, is set to reshape the stablecoin sector. These could challenge the position of players who fail to play by the rules but at the same time, create an opportunity for new entrants.
