Wy Stripe Spent $1.1bn on Stablecoin Startup Bridge

📣 While everyone was dismissing crypto as dead, Stripe just bet $1.1bn that stablecoins are the future of global payments

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I believe Stripe's acquisition of Bridge will go down as an all-time great Fintech acquisition. 

Stripe is growing 20% YoY with $3.4bn net revenue. They need something massive if they want to hit the trillion-dollar market cap club like Meta, Google, or Tesla.

Stablecoins could be a paradigm shift if they become the next global rail for payments.

What’s Bridge?

Bridge provides software that helps businesses accept Stablecoin payments and simplifies the infrastructure (a bit like Stripe does for TradFi). It solves a huge long-term pain point for Stripe. Accessing a 24/7, instant, global, dollar-based rail means they can provide new value to customers. Sell from anywhere and get paid instantly in dollars without dealing with crypto complexity.

That’s why I think this is Stripe’s Instagram moment.

This post examines three lenses

First: This is a major narrative shift

• From Crypto the casino to Stablecoins for business
• It's also the largest Crypto acquisition in history
• And the largest acquisition in Stripe's history

Second: Stablecoins have steadily, quietly gained credibility and scale because they 

• Solve meaningful problems for PSPs and businesses with cross-border payments
• Have infrastructure that's ready for scale
• Have started to solve the last-mile problem in payments
• Have solved many pressing regulatory issues

Third: I think this will be a great acquisition because it will solve some Stripe-specific goals and strategic objectives. Stripe is:

• Moving up the stack into software. 
• Stripe is becoming an orchestration layer for other PSPs
• It's expanding internationally
• Stablecoins could be a paradigm shift to help Stripe grow much faster internationally.

(For a much more detailed primer on Stablecoins, check out "The next cross-border rail will be 10x more efficient" here.)

Narrative shift: From Casino to Commercially viable

The narrative has shifted on Stablecoins. In 2021, Stablecoins meant "Libra" to regulators, the effort by Meta to create its own coin. Or worse, Terra-Luna, the famous "algorithimic" Stablecoin that turned out to not be Stable. So how can the narrative have shifted to dramatically?

John Collison put it perfectly on the Money Stuff podcast this week:

❝ 

Money 2020 is a serious work conference, but to get to it you have to walk past the smokers, slot machines and blinking lights. Crypto is the same.

 John Collison

Crypto was famous in the mainstream consciousness for massive price rallies, meme coins, cringe-inducing hype, and outright scams. Most people in Crypto hate "Crypto". 

But this is why the metaphor is perfect.

Stablecoins have nothing to do with price. By their very nature, they're meant to be stable, and there are now Stablecoins that have passed the test of time. Paxos PUSD, Circle's USDC, and even the often-questioned Tether have maintained their peg to the US Dollar almost perfectly, come rain or shine.

It's the largest acquisition in Crypto history. Crypto founders who launched their own token often didn't need to get acquired because they'd already sold a token. The largest disclosed acquisition I could find was Ripple's acquisition of Metaco for $250m (which, quietly, is also a killer get, but that's another story).

It's Stripe's largest ever acquisition. $1.1bn is much more than a hedge or acqui-hire. Stripe’s previous acquisitions have been big (~900m for TaxJar according to Axios) but it often happened quietly without the amount being known. We can learn two things from their previous acquisitions.

• The things they buy often become a core part of the product
• They don't do this kind of thing by accident.

Logan Bartlett interviewed Stripe president Will Gaybrick on his podcast recently. When asked, what area do you hold a contrarian opinion and he said (paraphrasing) "I'm actually very excited by Stablecoins."

Why is this serious, grown-ass company, that does over $1bn in total processed volume so interested in Stablecoins. Shouldn't it just stick to its knitting and make a more global payments platform over traditional rails? Let's start with why Stablecoins.

Why Stablecoins matter now.

Deep in the payments industry, there are payment service providers (PSPs), leaders, and brands that take Stablecoins very seriously. Your boss might not anon, but your competitor, or someone, somewhere in that PSP does.

Why?

Payments have a last mile problem. The industry is architected around a hub and spokes model. So if you're trying to move dollars from London to New York, it's near instant and there are plenty of providers who will fight to get you the best possible price if you're a Fortune 500 company. But if you're a small business in the global south with an e-commerce store, the cost and pain can be so high it's just not worth it.

To quote Bridge.

For instance, only ~40 cents of every dollar donated to a global aid organization makes it to the end recipient. If you own a business in Mexico and need to pay a global vendor, these cross-border payments take days to settle and cost business owners 3-4%. The cost incurred to collect, convert, and transmit funds is immense.

 @stablecoins

Stablecoins are 24/7, global, and instant - a possible paradigm shift. The only things a Stablecoin requires are

1. compatible software and
2. an internet connection.

There's no other way to move dollars as instantly and cheaply. Moving a Stablecoin on an L2 like Base or a modern network like Solana is consistently cheap and consistently near-instant (seconds).

This solves problems for PSPs and their customers. Stripe is not the same company outside of the US and Europe. The long tail of Asian, LATAM and global south markets are very expensive and slow to integrate with. Stablecoins fix this.

Stablecoins have a first-mile problem, if they're too hard to use, nobody will use them. If you send someone $100, you generally don't have to ask which dollar flavor they'd like.If you want to send someone $100 in Stablecoins you might have to ask,

Which dollar? USDC? PYUSD? There are many flavors of Stablecoin from different issuers, and not all wallets support all tokens.

On which network? Are you using Solana, Ethereum, Lightspark, or one of the Eth L2s like Base?

Which wallet? Not all wallets support all networks. Some are more closed-loop in nature or use proprietary tokens.

Do I have the regulatory clarity? If you're a larger corporation, you might not want to touch Stablecoins (e.g., in the US) because it's unclear if you can.

The default way to access Stablecoins is also confusing. You have to take your regular dollars, buy digital dollars, add those to a wallet, find the address of the person you want to send to, and then hit send.

 Fintech Brainfood “The next cross border rail will be 10x more efficient”

The infrastructure is better and Bridge makes Stablecoins easy to use for developers. If you want to move Stablecoins in a way that's cheap, instant, and compliant, that's hard. You have networks like Ethereum and Solana, Wallets, and different coins like USDC or PYUSD (PayPal). Bridge makes all of that go away. Bridge makes Stablecoins work like someone who's never used Stablecoins think they should.

As Bridge themselves explain (emphasis mine):

We're building stablecoin Orchestration and Issuance as a service. Orchestration provides simple APIs to easily convert between any two dollar formats (USD/EUR, USDC, PYUSD, USDT, etc.). Issuance gives developers the ability to convert any of these dollars into a stablecoin they can customize and benefit from. Our Orchestration and Issuance APIs make it possible for any company and team to offer digital dollar-based services to their end consumers or businesses.

Which is exactly what Stripe does for traditional rails.

Bridge in particular, is winning in four main uses cases

1. Payouts. Bridge works with the US government, aid organizations and creator platforms to disburse payments via stablecoins.

2. Cross-border payments. Bridge has partnered with Bitso, the leading exchange in LATAM, to enable B2B cross-border payments via stablecoins. Businesses with MXN can pay vendors in USD (and vice versa) with funds moved through Bridge's stablecoin payment rails. Transactions settle in minutes and at a fraction of the cost vs. SWIFT.

3. Dollar-access. Chipper Cash and Dolar App work with Bridge to offer their consumers in Africa and LATAM, respectively, the ability to save and spend in US Dollars.

4. FX. Bridge enables some of the largest global companies to repatriate funds. These companies sell goods and services in LATAM or Africa and use Bridge to move money back to the US via stablecoins. Often, funds settle in <30 minutes vs. 2-3 days for traditional payment rails.

 @stablecoins

(Is it possible your opinion of Stablecoins is colored by the fact that you don't use them today? Yes, that's rhetorical and for the cynics reading)

While PayPal, Visa, and Mastercard are all exploring stablecoins, Bridge's focus on developer-first infrastructure made them uniquely valuable to Stripe.

Regulatory clarity is coming thick and fast. I can name two banks who have issued Stablecoins. Societe Generale and Banking Circle. Both banks are headquartered Europe, often perceived as the regulatory burdensome, nightmarish desert for innovation. This is partly thanks to the MiCA regulation that gives clarity to Stablecoins. 

But the idea that Stablecoins "are not regulated" is simply untrue. In most of the world (where this use case matters), they're well-regulated and commonplace. The US, too, has a patchwork of rules that make Stablecoins viable. Paxos (the provider of PayPal PYUSD) is a trust corporation headquartered in New York. 

And don't forget we're heading into an election year. Whoever gets in, I'll wager we're going to see a change at the SEC, and regulatory perspectives on Crypto.

You are systematically not paying enough attention to Stablecoins.

Stripe is paying plenty of attention.

Stripe’s Strategy and where Stablecoins fit

First, we need to zoom out and look at where Stripe is strategically trying to achieve

Stripe is trying to trying to

1. Move up into software and value-add
2. Move up into multi-PSP and orchestration (kinda)
3. Figure out the paradigm shift that gets them beyond 20% YoY growth. Stablecoins could be that.

Stripe’s growth engine is Billing. At $500m ARR it’s a unicorn. But as a business they’re doing $14B in revenue growing 20% a year. Net revenue is $3.2 billion. If they’re going to make it as a $trillion company one day, they need something that helps them go global and wider. They need a paradigm shift.

1) Stripe is moving up the stack into software. Historically payments companies compete on price. The newer companies like Adyen and Stripe compete on performance by fixing the infrastructure’s hidden problems. Like:

• Making payments work consistently. Payments fail. A lot. I often say payments are easy; the edge cases are hard. Stripe famously "made payments work like you'd expect they would if you never worked in payments." Moving money from A to B is a commodity. Making it more likely it gets there is value add.
• Improve checkout conversion. Stripe checkout is aggressively optimized to help users be more likely to complete a payment. Increasing conversion by 1% for a merchant who does $100m of payments a month pays for itself quickly.
• Helping you manage complex recurring payments. Billing cycles can be simple monthly subscriptions, or tiered based on usage. All of this needs to be compiled, billed, and reconciled. That’s hard. Outsourcing it makes sense. That’s why Stripe billing is driving so much growth for them. This helps Stripe tap into the massive B2B payments space, which is much larger than consumer (and pushes them into Wire / ACH territory).
• Helping you monetize payments. Shopify famously makes 70%+ of its revenue from financial services. This is the canonical use case for embedded finance, and way more than traditional payments. This is now so standard, every legacy acquirer is trying to figure out how they offer it.

Not included here, but I think the next layer up is to aggregate multiple payment types (like pay by bank) and get deeper into B2B payments.

2) Stripe is moving up to orchestration (kinda). It has announced support for 12 PSPs with its vault-forward API. This allows payments to have higher conversion in countries where Stripe doesn’t have a strong presence. It also helps their biggest clients manage the issue of having multiple payments partners. The idea is that why use orchestration when you could just use Stripe.

My ugly view of how they’re orchestrating

This helps:

• Expand market access. If you're a global platform, you'll find local PSPs can help with local payment methods like UPI, Vipps, iDEAL, the zoo of wallets in APAC, and Telcos in Africa. Stripe can’t be everywhere, in every rail, but they could orchestrate them.
• Improve conversion. As much as it tries, Stripe won’t always have the best conversion. By re-packaging other PSPs, they still get to be the first-choice for owning the software stack and dashboard of their clients.
• Win enterprises. At scale, moving money becomes more cost-effective, and conversion is higher if you go multi-PSP.

(This product is still early and very janky by Stripe standards, but it's a signal of intent. It also feels somewhat like a half-hearted move. How much do you really want to help your “competition”? Fun fact: Adyen also has a similar API but doesn’t market the offering.)

Let’s say they got all of this right. They’re an amazing business. Incredible.

But could they do more?

Is a paradigm shift on the horizon?

3) Stripe needs a paradigm shift. Stripe needs to go beyond cards. One way is to own B2B payments like ACH, Wire and get into pay by bank. The much bigger opportunity is to own the bridge between all payment types. Stablecoins could make payments just work for more international merchants and consumers. That extends the markets Stripe can operate in and it’s TAM dramatically.

Buying ChatGPT or Netflix subscriptions is much harder in the global south, where cards aren’t accepted widely. Stablecoins de-couple the payment acceptance type from moving the money. Push the Stablecoin to a wallet. Have the wallet convert the Stablecoin to the local payments rail (or vice versa)

Why go Multi PSP when Stablecoins could bridge all payment types?

• Stablecoins expand the TAM. Nigeria is incendentally one of the most successful markets for USD Stablecoin adoption. By simply adding Stablecoin acceptance in the checkout flow, ChatGPT gets access to one of the fastest-growing, young and innovative economies in the global south.
• Global 24/7 and instant provides new value. The world wants US Dollars because they’re stable. If you can offer yield and payout instantly you dramatically improve the merchant experience vs other providers.
• Stablecoins could be an alternative to being multi-PSP. Why go Multi-PSP? When could you use Stablecoins as a bridge between all PSPs? Why worry about integrating to 100s of different 3rd parties if Stablecoins can be programmed to manage some of that complexity for you.
• Stablecoins are software-led payments. Today we're limited by what underlying payment networks were designed to do. The innovation happens around the edges and we build workflows outside the payment. Stablecoins flip this, by baking the logic and programmability into the payments rail. 
• Stablecoins are becoming infrastructure for innovation and new products. Their first use cases are primarily replicating financial markets products, and automating trades, but this will expand. You could build any Stripe Billing use case in a Stablecoin. Stablecoins are now becoming a platform to build FX exchanges, trading and even "banking as a service" like offerings. 

Programmable payments means we can make entire Stablecoins that are automatically:

• FinCEN travel rule compliant (compatible with KYC/AML)
• Follow logcial conditions regardless of the holder (e.g. If customer sells X product, then make Y payment or if the price of an asset like oil goes up, then sell)
• Able to offer yield, by linking them to an underlying asset like a money market fund (like Blackrock's BUIDL).

4) Bridge is a great team with traction. Counting Bitso and the US Government as clients is a solid start. Zach is ex-Coinbase and Brex, and his co-founder is ex-Stripe and Brex. These are payments industry veterans with deep connections, which no doubt played into the timing of the deal. 

The future of payments

Stablecoins are not a consumer or business-facing experience. To most businesses or consumers, a Stablecoin will look like a dollar. It's just a dollar that's available instantly, 24/7, anywhere in the world. If you're in Argentina, that could be a huge hedge against inflation. If you're in Nigeria, it could allow you to access global platforms much more simply.

If you're a corporate treasurer, getting access to capital markets is now somewhat possible through platforms like Mercury and Ramp. 

Stablecoins are increasingly payment infrastructure. The "Stablecoin sandwich" is the idea PSPs and payment companies will use Stablecoins to settle with each other directly instead of waiting for the banks and SWIFT. Instead of the old cross-border rails, the Stablecoin sits between the PSPs. The advantage is that the sender and receiver never have to think about or worry about Stablecoins or Crypto or wallets.

The Stablecoin sandwich (bottom)

Stablecoins' programmability makes them a potential platform shift for payments and ideal for the payment infrastructure of tomorrow. Why build a ledger service and try to reconcile payments if there's a network that does that for an ultra-low fee? Why write complex software outside of the payment when you can bake it in? What if Stripe billing or its software worked worldwide, 24/7 and instantly?

What's the catch?

I've been on record as a fan of Stablecoins for a long time, but if I had to cross-examine this acquisition and Stablecoins generally, my argument would go like this:

Crypto is still awash with scams and fraud. Barely a day passes without a ransomware attack demanding Bitcoin or a vulnerable elderly person losing their life savings to a Crypto scam. This is a real problem and needs fixing (it's a big part of why I work at Sardine*). We have the same risks in all of financial services, but they're nuanced in Crypto and Stablecoins because they're more international by default.

Fortunately, Crypto actually has some mature approaches for managing allowlists, blocklists, and communication between KYC'd entities (through things like the InterVASP standard). 

Stablecoins are still serving mostly Crypto natives and Crypto curious people. Their biggest use cases are Crypto trading and speculation. Most global south use cases sit in a legal grey area, helping local citizens evade currency controls. Stablecoins have gained traction in these edge cases, but they have a long way to go before they're mainstream-ready.

Still, the timing of this acquisition isn't a coincidence.

Acquisitions are hard. Payments companies like Worldline, Global Payments and Nexi have been doing acquisitions for decades. Often the result is a short term revenue increase and a long-term mess where compliance systems, teams and processes are never fully integrated.

I suspect neither Stripe nor Bridge are blind to these challenges but went ahead with the deal regardless. I still can't shape the feeling we'll look back on this as one of the all-time great acquisitions in Fintech.

Why I think this could be their Instagram moment.

If we look back in 10 years, I think we'll see Bridge as driving a huge portion of Stripe's relevance and growth into new customer segments and geographies.

Stripe has barely scratched the surface of the Billing product if it becomes used for B2B payments, displacing wires and ACH. But the paradigm shift Stablecoins represent is bigger.

Payments industry growth is slowing, and it is held back by fragmentation.

Payments are broken, and Stablecoins were too hard to use to be a worthwhile fix.

Bridge is the first company to get meaningful traction, solving gaps in the payments ecosystem. Stripe is the perfect acquirer because they're software-led in their expansion and get where Stablecoins can add value to existing and new customers. 

From first principles, Stablecoins were always the right long-term answer for the internet-native, programmable payments rail. But until very recently, Stablecoins were too hard to use and considered too high risk. 

Stripe's timing here is perfect.

There are still massive problems to solve in the Stablecoin ecosystem. We still need a proper regulatory environment in the US. And acquistions aren't always easy to integrate. 

The future of payments isn't a commodity.

The future of payments is software.

Stablecoins are internet-native, software-native payments.

And they're just reaching the tipping point.

Will you take them seriously in your day job now?

You should.

ST.

4 Fintech Companies 💸

1. Concourse - AI Analysts for Corporate Finance teams

Concourse can summarize the change in financial markets, provide detailed revenue analysis, and calculate the cost of goods sold. It also provides write-ups of financial performance for internal distributions. Users can chat with their financial data, which helps to produce forecasts through integrations with bank accounts and accounting software.

🧠 The real work of finance teams in corporates is poorly understood. Corporate finance teams are exposed to currency movements and spend much time helping the business understand where revenue is and is not coming from. This is an efficiency unlock. AI has a habit of producing generic slop, but when packaged like this into a format as a product, it can be a huge time saver. Send this to your CFO.

2. Warrant - Marketing compliance AI and workflow

Warrant reviews marketing materials to align with regulated companies' brand and compliance rules. It can provide instant reviews and identify the wrong logo, missing or incorrect disclaimers, and potential violations. The service has an approvals workflow and manages version control.

🧠 There are hundreds of these. What's the moat? The value here is in the mix of brand, compliance, and workflow. A lot of the hard work in marketing is the project management, then at the 11th hour someone spots the wrong logo used. Worse, months later, Jason Mikula calls out your FDIC disclosure fail. It makes sense to have this together in one workflow.

3. Omnea - Procurement automation AI and workflow

Omnea gives staff a single chat entry point for any spend request. It helps manage renewals by automating sentiment reviews for a vendor owner. The service can automate purchase order creation, vendor setup, and vendor onboarding.

🧠 Everything is procurement. AI-driven workflow is the new SaaS workflow. This is a chatbot at the front but procurement workflow at the back. Buying things as a larger organization gets complicated. You have to collect countless certificates, documents, and financials, then review them all. Then, there's a ton of internal coordination. At most Fortune 500 companies, it's a mess of emails and poorly configured SAP instances. (These guys are targeting mid-market SaaS buyers.) Procurement is crying out for automation.

4. FutureMoney - Make your kid a millionaire

FutureMoney is the easiest platform for parents to manage tax-optimized investing for their kids. The service automatically invests into a diversified portfolio through a Junior Roth IRA and automates deposits.

🧠 This is possibly the best packaging of a kids' efficient savings service I've ever seen. The marketing focuses on the future cost of living and the power of compounding. This should be a product every Neobank and major bank offers. I want this.

Things to know 👀

1. The CFPB Finalized it’s Open Finance Rule (1033)

The CFPB has published its final rule for open banking or open finance known as “1033.” It requires data providers (banks and Fintech companies) to ensure consumer checking, savings and credit data is made available to 3rd parties. It requires 99%+ availability of data (which today is often much lower). Here’s some curated takes from smarter people than me. Large banks have until April 2026 to comply, while smaller banks have until April 2030.

🧠 Steve Boms provided an incredible summary of the key changes from October 2023 and the final rule.

• The final rule expressly included payments data.
• The covered accounts have not been expanded, but the CFPB notes it is likely to in the future.
• Tokenized account numbers (TANs) can only be used if they’re not used to restrict payment initiation.
• The 3500 millisecond response time has been softened to “commercially reasonable.”
• There is a prohibition against “evasion” (finding smart ways to evade the rule)
• The consumer not the data provider (bank) is the furnisher (provider) of the data under FCRA
• Secondary use is still very limited to consumer opt-ins, except for enhancing the product

🧠 Jonah pointed out, this regulation isn’t about account switching (we know that doesn’t work). But as pay by bank becomes more common place we’re going to need better fraud protections. (Unsurprisingly, I agree)

🧠 A lot of Fintech companies are excited. I’ve heard celebrations because this has been a multi-year battle and feels hard-won. Banks wanted to charge for the service, but the rule requires no fees, and requires banks to meet performance standards.

🧠 While others are disappointed. I heard one RegTech specialist complain that secondary use could not be things like industry benchmarking (e.g. for financial inclusion or fairness).

🧠 Pay by bank and alternative underwriting are becoming a default. We’re all going to have to get used to a market where there’s a new payments rail and set of credit data.

2. Apple and Goldman must pay $89m for mishandling card transactions

The CFPB ordered Apple and Goldman Sachs to pay the penalty for deceiving consumers and mishandling card disputes. Apple failed to send 10s of thousands of card disputes to Goldman, and when reported the bank failed to follow process. The accusation also included misleading

🧠 Sell products like a bank, get fined like a bank. Apple has viewed “services” as a key growth driver, and getting deeper into finance is a great way to monetize its audience. The problem is, if you’re the consumer front end, you own regulated processes like disputes, disclosures and complaints. Get that wrong. Get fined.

🧠 It’s not just small companies who struggle with “partnerships.” Apple’s default of vertically integrating, owning the experience and pushing suppliers hard on price breaks down when they hit banking.

🧠 Goldman “won” the Apple Card business but lost overall. Alex Johnson put it best “your margin is my counterparty risk.” The Apple Card was a company new to being a card issuing bank (Goldman) and new to being a program (Apple). As hard as anyone worked on the project, the company cultures foreshadowed their disaster. Goldman’s deal making culture “won” the deal but the problem came later. When you win on price, you lose on the long-term risk. Being efficient in finance is much harder than it looks.

Good Reads 📚

1. The changing face of finance

All credit is becoming private credit. Large banks like JP Morgan are now launching private credit funds as bank balance sheets are less and less able to meet demand in a post-Global Financial Crisis world. The private credit fund market cap has increased 5x since 2014, while banks' market cap has increased 1.4x.

Now, these funds have their sights set on the core lending activity of banks

🧠 If Fintech is disrupting the distribution of finance. Private credit is disrupting the manufacture. It keeps playing out. 

That's all, folks. 👋

Remember, if you're enjoying this content, please do tell all your fintech friends to check it out and hit the subscribe button :)

(1) All content and views expressed here are the authors' personal opinions and do not reflect the views of any of their employers or employees.

(2) All companies or assets mentioned by the author in which the author has a personal and/or financial interest are denoted with a *. None of the above constitutes investment advice, and you should seek independent advice before making any investment decisions.

(3) Any companies mentioned are top of mind and used for illustrative purposes only.

(4) A team of researchers has not rigorously fact-checked this. Please don't take it as gospel—strong opinions weakly held

(5) Citations may be missing, and I've done my best to cite, but I will always aim to update and correct the live version where possible. If I cited you and got the referencing wrong, please reach out