Today Bloomberg reported that payments firm Stripe is in advanced talks to acquire B2B stablecoin tech firm Bridge, citing sources. When we recently wrote about Stripe re-enabling stablecoin acceptance for merchants, we referenced Bridge as one of the companies creating the infrastructure to enable stablecoins to be used for mainstream payments.
The company formally launched in August after 2.5 years of development, and has raised $58 million in funding, including from Sequoia, Ribbit, Index, Haun Ventures and others.
To date, stablecoins have mainly been used in the crypto world and by those that live in jurisdictions with volatile local currencies. Others might occasionally use them for cross border payments, but until recently that has not been a user friendly experience.
That’s changing in two ways. On the consumer end, apps that look more like PayPal and Venmo are popping up with stablecoins powering cross border transfers behind the scenes. And on the business end, new APIs are supporting payments. For example, crypto exchange Bitso provides Mexican businesses with an MXN-USD payment rail using Bridge’s APIs.
Several aspects make Bridge a superb match for Stripe. Both companies are essentially B2B2C. In other words, they provide infrastructure for businesses to support both business and consumer payments. Both are ultimately global payment orchestrators. Stripe with card and bank payments, Bridge with stablecoins.
SpaceX uses Bridge for global treasury management. Bridge provides on and off-ramps between fiat currencies and stablecoins around the world, including providing FX conversions to dollar stablecoins. This enables the stablecoins to be used for instant cross border payments.
The Bridge founders
Bridge co-founder and CEO Zach Abrams previously founded P2P payments app Evenly with Sean Yu and they sold it to Square. Abrams then worked at Square for a couple of years until 2015. Subsequently, he was head of consumer product at Coinbase for two years until July 2019 and Chief Product Officer at Brex, before reconnecting with Yu for Bridge.
With an acquisition, outsiders tend to focus on the payout. But for the founders, a company is their creation. Selling to Stripe would provide the opportunity to accelerate the mainstream rollout of stablecoins at a far more rapid clip than a standalone firm.
Ledger Insights Research has published a report on bank-issued stablecoins and tokenized deposits featuring more than 70 projects. Find out more here.
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