Payments giant Stripe is deep in negotiations to acquire Bridge, a fintech startup specializing in stablecoins. This potential deal could shift the dynamics in the realm of cryptocurrency payments.

Crypto Push for Stripe

Bridge has raised $58 million in funding, with investments from Sequoia Capital and other major venture funds. Acquiring Bridge would be a significant step for Stripe, which recently resumed accepting crypto payments after a six-year hiatus. While the company has shown no rush for an IPO, its renewed interest in cryptocurrencies draws attention. For instance, Stripe has started accepting USDC in the U.S., following others like Visa. Besides Stripe, companies like Robinhood and Revolut are also considering launching their own stablecoins.

Stablecoin Competition Heats Up

Many fintech startups have tried to challenge Tether's dominance, whose USDT accounts for two-thirds of the stablecoin market. USDC, issued by Circle, lags behind with a circulation of $36 billion. However, new EU regulations known as MiCA might change the landscape. They require exchanges operating in the EU to delist stablecoins without necessary permits. Tether is working on a solution to comply with these requirements, while Circle already holds the necessary licenses.

Profits and Emerging Markets

Tether's profits from the reserves backing USDT reached $5.2 billion in the first half of 2024. Stablecoins are becoming popular in economies with instability, such as Brazil, Indonesia, and Turkey. They are used to store value and protect savings. About 40% of stablecoin users in these regions use them for payments, and over 20% receive salaries using stablecoins. In Russia, stablecoins are even used to dodge sanctions.

The ongoing integration of stablecoins into the global financial system creates opportunities for new players and startups. Time will tell if the Stripe and Bridge deal significantly impacts the markets and the future role of stablecoins.