Global financial service Stripe has acquired stablecoin orchestration platform Bridge in a reported $1.1bn deal, the largest acquisition in cryptocurrency history. 

The acquisition symbolises Stripe’s full commitment to the stablecoin industry, a market that has been flourishing with usage on the rise and more prominent players entering the space, such as PayPal and Ripple Labs

Marca Wosoba, COO of payments company ZBD, believes that the deal compounds the emerging realisation that fintechs are becoming the predominant financial entities that are embracing the stablecoin and crypto markets the most. 

She said: “Stripe’s acquisition of Bridge is newsworthy, as this is yet another major fintech entering the crypto space, following Robinhood’s $200m acquisition of Bitstamp in June this year. 

“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traditional fintech companies are increasingly recognising the value of crypto to transform industries and leapfrog outdated payment technologies and infrastructure. 

“Fintech giants like Stripe are also taking advantage of current valuation multiples – which haven’t yet recovered from their 2021 highs – to acquire crypto businesses at relatively attractive prices.”

It may come as no surprise that fintechs are more open to crypto than traditional financial entities. Revolut, for example, has been a longstanding supporter of crypto, launching its own crypto exchange Revolut X, and is even considering launching a native stablecoin. 

Whilst still largely unregulated in a majority of countries, crypto companies can operate in large markets through various licences, such as by picking up an Electronic Money Institution (EMI) licence in Europe specifically, seen when Crypto.com and Circle received this in the UK and France respectively. 

Fintech companies have often led the way when it comes to financial innovation and unearthing new solutions to help drive the industry forward. Whilst crypto and stablecoins may not be anything new now, they have still yet to realise their full potential when it comes to payments, more specifically cross-border payments. 

Wosoba believes that a company the size of Stripe, which has already begun enabling more efficient fiat-to-crypto transactions, can help accelerate stablecoin-backed cross-border payments in a bid to “transform” the process. 

She explained: “Stripe’s acquisition of Bridge is clearly a bet on stablecoins and their potential to revolutionise cross-border payments, which remain inefficient in terms of both speed and cost. These transactions also lack transparency – payments can take multiple days to process, with limited visibility for both the sender and the recipient. 

“In a world where real-time/instant payments have existed since the UK introduced Faster Payments in 2008, the fact that cross-border payments remain so inefficient 16 years later is astonishing. 

“The industry can and must transform cross-border payments—and stablecoins, alongside other cryptocurrencies, have a significant role to play in this evolution. I’m excited to see what emerges.”

Despite growth over the past year, stablecoins’ benefits have yet to be truly realised. They have the ability to significantly increase the speed of cross-border payments from days to hours, and even minutes, but it may take more adoption, potentially from traditional financial institutions. 

It will be worthwhile monitoring how Stripe, a company worth up to $70bn, may introduce stablecoin payments to its large international userbase, but it may also take more large-scale firms to jump onboard before stablecoins can truly take off.