Stripe Acquisition of Bridge: A New Chapter in the Rise of Stablecoins

Stablecoins are sweeping the globe, with a year-on-year growth rate exceeding 50%, and the global transaction settlement volume is already more than twice that of Visa. As one of the three major payment giants in the United States, Stripe has finally placed a big bet after attempting cryptocurrency payments this year, acquiring the stablecoin API company Bridge.xyz, which was founded only two years ago, for $1.1 billion, creating the largest acquisition case in the crypto industry.

1. The Rise of Stablecoins

Recent reports released in the cryptocurrency industry clearly state that stablecoins have become one of the most obvious "killer applications" in the Web3 space. Thanks to the widespread adoption of smartphones and the implementation of blockchain technology, stablecoins may become the greatest financial empowerment movement in human history.

Stablecoins simplify the value transfer process, and their quarterly trading volume has already surpassed Visa's $3.9 trillion by more than double. Measured by daily active addresses, stablecoins account for nearly one-third of daily cryptocurrency usage at 32%, second only to decentralized finance (DeFi) at 34%.

The total supply of stablecoins is approximately $170 billion, settling assets worth trillions of dollars each year. There are about 20 million addresses on-chain that engage in stablecoin transactions each month, with over 120 million addresses holding a non-zero stablecoin balance. These data indicate that stablecoins are becoming a currency system parallel to traditional financial infrastructure.

Some surprising stablecoin statistics:

• Stablecoins are now the sixth largest purchasers of U.S. Treasury bonds.
• 30% of cross-border remittances are made using stablecoin.
• Major payment companies all have stablecoin projects
• Global financial institutions and some countries are exploring the utility of stablecoin payments.
• The application of stablecoins in remittances, cross-border payments, and other non-crypto areas is becoming increasingly prominent.

2. The Core Business of Bridge

Bridge is a stablecoin API engine that provides software tools to help companies accept stablecoin payments. Its core products include:

1. Orchestration API: Integrate stablecoin payments into the existing business API of Web2 companies, addressing compliance, regulatory, and technical complexities.

2. Issuance API: Helps users issue their own stablecoin and provides US Treasury investment options to improve capital utilization.

3. Stablecoin cross-chain transactions, fiat/crypto currency deposit and withdrawal acceptance, virtual bank account services.

The API of Bridge allows users to transfer funds globally within minutes, seamlessly send stablecoin payments, convert local fiat currency to stablecoin, and provide USD and EUR account services for global users.

Bridge has attracted numerous clients, including SpaceX, and has established partnerships with crypto companies such as Stellar and Strike. According to statistics, Bridge has processed an annual payment amount exceeding $5 billion.

Three, The Vision of Cooperation between Stripe and Bridge

The collaboration between Stripe and Bridge is essentially a continuation of the rise of stablecoins, and their integration will further assist Stripe in implementing its cryptocurrency payment strategy, making it easier to handle stablecoin transactions.

The common vision of both parties is to provide a better currency for an increasingly globalized world: a currency that can flow across borders, is freely accessible to anyone, and allows for almost free remittances. They believe that significant changes in financial services require long-term accumulation, achieved through continuous improvement of products and platforms, as well as building trust relationships with customers, regulators, and partners.

IV. Stripe's Cryptocurrency Layout

Stripe has recently been active in the cryptocurrency space:

1. Announced on October 10 the re-access of the cryptocurrency payment gateway for US merchants, supporting payments in USDC and USDP through Ethereum, Solana, and Polygon.

2. In July, EU users will be allowed to purchase cryptocurrencies such as BTC, ETH, and SOL.

3. In June, collaborate with Coinbase to integrate Base Layer 2 into cryptocurrency payment products, while allowing users to use Stripe's fiat to cryptocurrency gateway.

Stripe's services are essentially On/Off Ramp and cross-chain settlement of crypto/stablecoin. The acquisition of Bridge can:

• Quickly fulfill relevant functional requirements
• Better serve existing customers
• Expand Stripe's external business

5. The Stablecoin Strategies of Payment Giants

Other payment giants are also actively laying out in the stablecoin field, apart from Stripe:

After Paypal issued PYUSD on Ethereum in August last year, it launched PYUSD on Solana in June this year. According to data, in August this year, PYUSD on Solana accounted for 64% market share, while Ethereum accounted for 36%, with a total market value of 1 billion USD.

Paypal has clarified the evolutionary approach for stablecoin payments towards large-scale adoption:

1. The introduction of concepts brings cognitive awakening
2. Integrate to realize payment utility
3. Stablecoin payments are everywhere

Currently in the second stage, moving towards the third stage.

Another payment giant Block (Square) has also made numerous inroads into the crypto space, holding a large amount of Bitcoin.

6. Conclusion

In the cryptocurrency space, companies with the best APIs and connections may become industry leaders. Bridge may be one of them. Future acquisition deals may be even more noteworthy. We are just beginning to witness the transformation of this industry.