What Stripe’s Acquisition of Bridge Means for Fintech and Stablecoins

In February, Stripe completed its acquisition of stablecoin platform Bridge — its largest acquisition to date — following the reintroduction of crypto payments on Stripe for U.S. businesses last year. More broadly, after years of steady stablecoin growth, this acquisition represents the payment industry’s first big acknowledgement that stablecoins can go further mainstream. In 2024, stablecoins moved $15.6 trillion in value — putting stablecoin transaction volume on par with Visa’s.

But what are stablecoins? Stablecoins are crypto assets pegged to the value of fiat currencies, usually the U.S. dollar (USD). By far, the most common stablecoins are “fiat reserve stablecoins”— for instance, USDC (“USD Coin”), which is issued by Circle, is backed 1:1 by a mixture of short-dated U.S. treasuries and bank deposits.

Stablecoins saw significant consumer adoption over the past year. This was particularly true for regions with volatile national currencies (e.g., Nigeria or Argentina); where remittance pathways were expensive (e.g., Colombia); and which had low international card acceptance (e.g., Pakistan). Stablecoins allow users to preserve the value of their assets in USD; to transfer money globally, quickly, and cheaply; and to spend on international websites where they are accepted, and local card payments are not.

Stablecoins also benefit businesses, from small shops to larger enterprises. Stripe CEO Patrick Collison described them on Twitter as “room-temperature superconductors for financial services,” further observing that “thanks to stablecoins, businesses around the world will benefit from significant speed, coverage, and cost improvements in the coming years.” Since Bridge is a developer-first payments company (much like Stripe) — making it possible for developers to easily convert between any two dollar formats with a single API, using stablecoins -– Bridge offers three key services, as articulatedby the company:

Orchestration: Developers can move, store, and accept stablecoins with a few lines of code because Bridge handles all of the regulatory and compliance requirements, and abstracts away technical complexity.Issuance: Developers can issue their own stablecoin in minutes. Bridge then invests stablecoin reserves in U.S. treasuries and shares the economics with the developer.Money transfer: Developers can transfer funds across the globe, and offer USD and Euro accounts, for consumers and businesses globally.

Bridge’s current use cases include Starlink using Bridge to repatriate funds from Starlink sales in Argentina; consumers in Nigeria paying for YouTube Premium or ChatGPT with stablecoins; and small businesses in the U.S. taking payments from customers around the world.

Stripe’s acquisition of Bridge aligns with its mission to grow the GDP of the internet. Specifically, stablecoins offer Stripe two advantages: First, by supporting stablecoins, Stripe can transact across borders more cheaply in certain corridors, reduce transaction failures, and improve conversion rates in countries with underdeveloped payment infrastructures (i.e., regions where Stripe has a limited presence or fewer payment partners). Second, stablecoins enable Stripe, in some cases, to offer their merchants a cheaper alternative to credit card payments. In 2024, Stripe grew 38% — surpassing $1.4 trillion in total paymentsvolume; the Bridge acquisition could therefore fuel further global growth through stablecoins.

From the broader fintech perspective, we see three industry barriers to further stablecoin adoption, including unclear regulatory frameworks around the world, although these are quickly improving; cumbersome user experiences, especially given they are not yet widely available through traditional banks and payment mediums; and some trust issues, which may slow some businesses and consumers on adoption. But stablecoins are a way to “reset” the currently closed, centralized (yet patchwork) global financial system, argues a16z General Partner Chris Dixon. He describesthem as “the WhatsApp moment for money,” observing that they’re our first real shot at doing for money what email did for communication: make it open, instant, and borderless.

Beyond applications like cross-border payments and others, stablecoins also offer new infrastructure to help AI agents transcend the limitations of today’s financial infrastructure, which was designed for humans, not AI. For example, when an AI agent wants to make a payment on your behalf, whose card or wallet does it use? Who authorizes the transaction? Where in the transaction does the risk sit? What if an AI agent wants to pay another AI agent? Stablecoins can help solve these problems because they are, by nature, programmable thanks to blockchains — which allow developers to set budget rules, automatically trigger payments based on specific criteria, and facilitate micropayments. Stripe has an existing solution to this problem through their agent toolkit, which allows AI agents to create one-time virtual cards to perform e-commerce transactions. The toolkit is currently being used by Perplexityto enable its autonomous shopping experience. Stablecoins would be an appropriate alternative or expansion building on this.

We’ll be attending Stripe Sessions in May to get the latest updates. For more on stablecoins, follow a16z crypto’s coverage here.

James da Costa is a partner at Andreessen Horowitz, where he focuses on investing in B2B software and financial services.

Sam Broner is an investing partner for the a16z crypto team.

Recent M&A Deals and Market Intel

Klarna and eToro, both of which had planned to begin their IPO roadshows the week of April 7, have paused and postponed those efforts. Circle, which filed its S-1 with the SEC on April 1, is reportedly “watching the market.” Chime, which was set to publicly file its financials, has delayed that step — and in turn its IPO.

Capital One announced that it received final regulatory approvals for its acquisition of Discover on April 18. The transaction is expected to close on May 18.

Checkr announced its acquisition of Truework on April 17 to expand consumer verifications.

Pipe announced its acquisition of Glean.ai, an AI-powered spend management company, on April 15. Glean.ai’s spend management solution will complement Pipe’s existing embedded capital and business charge card solution.

Intuit announced its acquisition of key technology and talent from Deserve on April 14. The acquisition aligns with the company’s connected business platform strategy and will enable further investment and expansion of its money offerings.

Webull completed its business combination with SK Growth Opportunities Corporation (SPAC).