As a seasoned observer of the ever-evolving digital economy landscape, I find myself intrigued by Stripe’s strategic move to acquire Bridge, a promising stablecoin platform. With over a decade of experience tracking the rise and fall of tech startups, I can attest that this acquisition, valued at a staggering $1.1 billion, underscores the growing importance of stablecoins in our increasingly digital world.
Financial powerhouse Stripe has finalized the purchase of Bridge, a company specializing in stablecoins, after a transaction worth more than $1 billion was agreed upon.
In a post on October 20th, Michael Arrington, one of TechCrunch’s co-founders, announced (without disclosing specifics) that Stripe had completed an acquisition for a total of $1.1 billion.
This deal is done. $1.1b
— Michael Arrington 🏴☠️ (@arrington) October 20, 2024
As of press time, the companies have yet to make an official statement about the purchase.
A week ago, crypto.news announced that the companies were in the last rounds of discussion, yet no conclusion had been reached. Neither Stripe nor Bridge validated this development back then.
As a crypto investor, I’m excited to be part of the journey with Bridge, a platform established in 2022 by seasoned executives like Zach Abrams and Sean Yu, formerly of Coinbase. This innovative solution streamlines the process of generating, moving, and safeguarding stablecoins. The recent acquisition comes after a successful $40 million investment round in August, spearheaded by prominent venture capital firms such as Sequoia, Ribbit, and Index.
Simultaneously, Stripe’s investment fits with their strategy to broaden their offerings within the cryptocurrency market. Previously, this global payment processor started accepting Bitcoin payments back in 2014, but they ceased this service four years after due to its limited usage.
Moving ahead to 2024, the company’s president, John Collison, declared their return to the cryptocurrency industry, focusing on stablecoin transactions. He emphasized the rising interest in blockchain solutions because of faster transaction times and reduced expenses compared to traditional methods.
In simpler terms, Stablecoins are digital money types that hold their worth steady by being connected to reliable resources such as U.S. dollars or other traditional currencies. This helps them avoid the price fluctuations typical of cryptocurrencies like Bitcoin. Due to their stable value, they can be conveniently used for everyday transactions.
Beginning on October 15th, Stripe began accepting Circle’s USDC stablecoin in collaboration with Paxos, through its “Pay with Crypto” feature. As a result of this partnership, merchants worldwide, spanning approximately 70 countries, gained the ability to process stablecoin payments that are subsequently settled as fiat currency.
In the past, Stripe has interacted with the digital currency world by undertaking several projects such as enabling payments for creators using USD Coin (USDC) and introducing a service for converting fiat currency into cryptocurrency in the year 2022.
Stablecoin demand on the rise
In Q3 2024, the use of stablecoins saw a peak, reaching almost $170 billion in total value. This sector, as predicted by Ripple‘s CEO, Brad Garlinghouse, could escalate to a staggering $3 trillion by the year 2030.
Lately, numerous conventional financial systems have started to explore the dynamic market of stablecoins. Take for example, early October when the global payment system Visa unveiled a platform enabling banks to mint their own fiat-backed stablecoins. This move was spurred by the observation that transaction volumes in stablecoins were quickly approaching those seen in traditional payment systems.
In the previous year, PayPal stepped into the market for stablecoins by introducing PayPal USD (PYUSD) on Ethereum, enabling cheaper transactions without the need for a central intermediary. Since that time, this stablecoin has expanded to include Solana and now boasts a market capitalization of more than $627 million according to data from Coingecko.
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2024-10-21 11:22