According to an announcement on October 21, payments giant Stripe has acquired stablecoin platform Bridge for a total of $1.1 billion, more than five times its valuation of $200 million.
The acquisition is part of Stripe’s plan to enter the stablecoin market. According to the announcement, the companies said they will focus on expanding the adoption of stablecoins to make it easier to move, store and use money around the world.
Forbes magazine first reported rumors of the deal on October 17th. Michael Arrington, founder of TechCrunch and venture capital fund Arrington Capital, later confirmed the report and revealed that the deal closed on October 20th.
On August 29, Bridge received $58 million in a private funding round with participation from Sequoia Capital, Ribbit Capital, Index Ventures, and Haun Ventures, according to DefiLlama data.
Bridge provides the infrastructure for issuing tokenized money and moving it on various blockchains. The platform also supports government initiatives and counts SpaceX, Coinbase, and Stellar among its clients.
The stablecoin platform said in its announcement that Stripe shares its view that stablecoins have the potential to have a significant global impact, adding:
“Stablecoins solve critical financial problems by making money easier to move, more economically held, and cheaper to send. This is not about ‘crypto’; It solves real-world problems in a globalized economy. ”
Meanwhile, Stripe’s total payment volume in 2023 exceeded $1 trillion, an increase of 25% in one year. Additionally, Stripe is the second largest payment processing technology, with a 17% market share, according to Statista data.
Nic Carter, partner at Castle Island Ventures and co-founder of Coinmetrics, commented that Stripe’s acquisition of Bridge will “turbocharge” the stablecoin space. He added that generalist venture capital funds that have exited cryptocurrencies will pivot back to the market.
Circle CEO Jeremy Allaire echoed Carter’s remarks.
“Let’s try this!”
Stablecoins are becoming mainstream
The acquisition comes at a pivotal time for stablecoins, which have been gaining momentum in recent months.
According to a16z’s report “State of Crypto 2024,” stablecoin trading volume reached $8.5 trillion in the second quarter, accounting for 32% of all cryptocurrency usage activity.
Additionally, the report highlighted that this is more than double the $3.9 trillion that Visa registered during the same period.
Despite their popularity in cryptocurrencies, stablecoins have only begun to penetrate mainstream finance. Revolut is rumored to be launching a stablecoin, and Visa has announced a platform to help banks issue fiat-backed tokens.
Furthermore, Thailand’s Siam Commercial Bank has revealed that it is adopting the use of stablecoins to process cross-border payments.
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