Bridge, a platform co-founded by former Square and Coinbase employees Zach Abrams and Sean Yu, successfully raised $58 million to develop a global payment network using stablecoins.
Introduction
Bridge, a company focused on using stablecoins to create a global payment network, raised $58 million from venture firms like Sequoia, Ribbit, Index, and Haun Ventures. The firm aims to challenge traditional payment systems, such as SWIFT and credit cards. Co-founders Zach Abrams and Sean Yu have been working on Bridge for the past 2.5 years.
Bridge Services: Orchestration and Issuance
Bridge provides two core services: Orchestration and Issuance. The Orchestration service offers APIs that streamline the conversion between different currencies like USD, EUR, USDC, PYUSD, and USDT. This facilitates seamless international payments and currency exchanges with low fees and instant settlements. The Issuance service enables developers to convert any of these currencies into a customized stablecoin, allowing businesses to offer digital dollar-based services tailored to their specific needs. Quote from Zach Abrams: 'We built Bridge as a low-level set of APIs that would enable companies to use a stablecoin rail without thinking about it.'
Advantages and Challenges of Stablecoins
Stablecoins like USDT and USDC have reached market caps of $118 billion and $34.6 billion, respectively, in recent years. Key advantages of stablecoins include lower transaction fees and faster settlement times. However, stablecoins also face challenges such as maintaining stability and transparency. For example, the collapse of TerraUSD in 2022 raised significant concerns about the reliability of stablecoins. Similarly, USDC temporarily lost its dollar peg in 2023 due to concerns over its reserves, but quickly recovered after FDIC intervention. Market leader Tether has also faced scrutiny over its accounting practices. Bridge's founders believe their fintech experience gives them an edge in navigating these challenges and building a stable and accessible platform for a wide range of businesses.
Bridge plans to use the $58 million in funding to expand its services and bring stablecoin solutions to a broader audience. The firm has already started forming strategic partnerships, such as the collaboration with Bitso to enable business-to-business cross-border payments in Latin America using stablecoins.
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