Web3 payment platform Bridge, co-founded by former Square and Coinbase employees Zach Abrams and Sean Yu, has raised $58 million to develop its payment network, according to an August 29 Fortune report.
Development of Bridge Platform
Bridge aims to build a global payment network centered around stablecoins, challenging traditional payment systems like SWIFT and credit cards. Investors in the platform include Sequoia, Ribbit, Index, and Haun Ventures. Recently, Bridge closed a funding round that included a previously unannounced $40 million investment by Sequoia and Ribbit, bringing the total to $58 million. This funding will enable Bridge to expand its services and bring stablecoin solutions to a wider audience. Over the past 2.5 years, Bridge has formed strategic partnerships, including a collaboration with Bitso to enable business-to-business payments in Latin America using stablecoins. > “We built Bridge as a low-level set of APIs that would enable companies to use a stablecoin rail without thinking about it,” Abrams said.
Advantages of Stablecoins
Stablecoins such as USDT and USDC have reached market caps of $118 billion and $34.6 billion, respectively. Stablecoins offer numerous advantages over traditional fiat currencies, including lower transaction fees and faster settlement times. Unlike fiat transactions, which are often subject to bank operating hours and high fees for cross-border payments, stablecoins enable instant, low-cost transfers that can be conducted 24/7. Bridge envisions a future where stablecoins function as the global payment rail, similar to how Stripe facilitates online payments or Plaid connects apps to bank accounts.
Challenges and Issues
Despite their advantages, stablecoins have faced challenges, particularly around their stability and transparency. The collapse of TerraUSD in 2022 raised substantial concerns about the reliability of stablecoins. Similarly, USDC temporarily lost its peg in 2023 due to concerns over its reserves, though it quickly recovered after the FDIC intervened. Market leader Tether has also faced scrutiny over its accounting practices. However, Bridge’s founders believe that their fintech background gives them a unique edge in navigating these challenges. The Bridge team aims to build a stablecoin platform that is reliable and accessible to a broad range of businesses, including crypto startups and traditional fiat companies.
Bridge aims to transform global payment systems by offering more efficient and cost-effective solutions centered around stablecoins. With significant investments and established partnerships, the company is well on its way to achieving its ambitious goals.
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