Why Stripe's $1bn Bridge Deal Signals Fintech Crypto Push
Global payments infrastructure provider Stripe, which processes online transactions for millions of businesses, has acquired Bridge, a stablecoin infrastructure startup, in a deal reportedly worth US$1.1 billion.
The acquisition comes at a key point for the digital assets sector. Major financial institutions including Visa and SWIFT have begun supporting stablecoins natively, while regulators worldwide are developing frameworks to oversee stablecoin infrastructure after PayPal’s launch of its USD stablecoin in 2023 and Robinhood's US$200m acquisition of cryptocurrency exchange Bitstamp in June 2024.
Bridge: A journey of rapid growth
Bridge, founded two and a half years ago, has experienced a period of dramatic expansion in its core stablecoin infrastructure business. “Our business has grown more than 10 times this year. But more importantly, we're now helping hundreds of developers all around the world,” Zach Abrams, CEO and co-founder of Bridge, says on X.
Bridge is joining forces with Stripe!
— Zach (@zcabrams) October 21, 2024
I’m incredibly excited
We started 2.5 years ago and we’ve done a lot since then :) We’re going to do a whole lot more in the years ahead. This is an important milestone, but we’re still at the very beginning of the Bridge journey.
We…
The company launched its APIs in March 2023, during a period of uncertainty in the digital asset sector. “Our first year was hard. The digital asset space was in turmoil. We struggled to find partners and customers,” he says. “After launch, we quickly saw inbound interest from cross-border payments companies.”
Market evolution
Since its founding, Bridge has developed from providing cross-border payment solutions to supporting government aid disbursement across Latin America. The company also created Virtual Accounts, enabling fintech companies such as Dolar App and Chipper Cash to offer USD holdings and spending capabilities globally.
“Today, we're moving many billions in payment volume,” says Zach. “Their products are giving millions of consumers and businesses more economic choice.”
Institutional adoption
The deal comes as major financial institutions increase their involvement in digital currencies. Visa and SWIFT have begun supporting stablecoins natively, while regulators worldwide are developing frameworks to oversee stablecoin infrastructure.
The acquisition marks a significant entry into the cryptocurrency sector for Stripe, which was valued at US$65bn earlier this year. Founded by billionaire brothers John and Patrick Collison in 2010, Stripe has grown to become one of the highest-valued private startups in the United States.
“Stablecoins represent an entirely new payments platform. Realising the potential of this platform will be a decades-long journey,” Bridge said in an announcement on X. “We need money that can move across borders; be freely accessible to anyone, in any country; and can be sent at almost no cost.”
The company has expanded its client base to include SpaceX for global treasury management, alongside government entities and financial technology companies. “Each new use case was larger than all of those that came before it,” says Abrams.
Cross-border innovation
“This acquisition further demonstrates that traditional fintech companies are increasingly recognising the value of crypto to transform industries and leapfrog outdated payment technologies and infrastructure,” says Marca Wosoba, Chief Operating Officer at digital economy payments company ZBD.
The move follows PayPal’s launch of its USD stablecoin in 2023, which made it the first major fintech to integrate digital currencies for payments and transfers. It also comes after Robinhood, the retail investment platform, acquired cryptocurrency exchange Bitstamp for US$200m in June 2024.
Market timing
The transaction occurs during a period of subdued valuations in the cryptocurrency sector, which remain below the peak levels seen in 2021. This market environment has created opportunities for strategic acquisitions by established fintech companies.
“As we've gotten to know the Stripe team, it's become clear that we both share a vision for what's possible with stablecoins and an excitement around the opportunity to create and build this future,” Zach says. “Stripe operates globally and understands better than almost anyone the problems created by our existing localised payment systems.”
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