In a significant move, Stripe, the fintech giant, is re-entering the cryptocurrency market after a brief hiatus. On Thursday, the company announced that it will allow customers to accept cryptocurrency payments, starting with USDC stablecoins on Solana, Ethereum, and Polygon. This marks the first time since 2018 that Stripe has supported crypto payments.
A Brief History of Stripe’s Dance with Crypto
Stripe’s journey with cryptocurrency began in 2014 when it launched its first efforts into testing Bitcoin. The company saw potential in blockchain-based technologies to affect financial services, but it also walked a fine line to avoid being too heavily associated with unstable markets.
"Stripe’s support is crucial here due to the nature of Bitcoin: It doesn’t have all the qualities normally expected of money," said one of its earliest testing partners at the time.
However, by 2018, Stripe pulled out of cryptocurrency support, citing that Bitcoin had become less useful for payments. The company also dropped support for Facebook’s Libra project in 2019.
Why Stablecoins this Time Around?
After a three-year hiatus from crypto efforts, Stripe has returned with stablecoins, which are designed to maintain a stable value relative to fiat currencies. USDC is one of the leading stablecoin providers, known for its reliability and low volatility.
Stripe co-founder and president John Collison will be announcing the news at the company’s Connect developer conference in San Francisco. In an earlier statement, he joked about transaction settlements and costs no longer being comparable to Christopher Nolan films.
"Transaction settlements are no longer comparable with Christopher Nolan films for length… And transaction costs are no longer comparable with Christopher Nolan films for budget."
What this Means for Stripe
This re-entry into the crypto market is part of a broader strategy by Stripe to open up its walled garden and integrate competing payment providers. The company aims to expand its financial services tooling, allowing customers to connect multiple payment providers.
"Stripe, doubling down on embedded finance, de-couples payments from the rest of its stack."
A Timeline of Stripe’s Crypto Efforts
- 2014: Stripe launches its first efforts into cryptocurrency with tests on Bitcoin.
- 2018: Stripe pulls out of cryptocurrency support, citing Bitcoin’s volatility and instability.
- 2019: Stripe drops support for Facebook’s Libra project.
- 2022: Stripe announces payouts in USDC stablecoins with Twitter as a marquee customer.
What’s Next for Stripe
While it is unclear how long this latest crypto effort will last, Stripe has already begun evaluating other stablecoins and platforms. The company sees an opportunity to expand its presence in the cryptocurrency market.
Conclusion
Stripe’s re-entry into the crypto market marks a significant development in the fintech industry. With the use of stablecoins, Stripe aims to provide a more reliable and secure payment experience for its customers. As the market continues to evolve, it will be interesting to see how Stripe’s efforts shape the future of cryptocurrency adoption.
