After a break of 6 years, Stripe is reentering the world of cryptocurrency by allowing customers to accept payments with USDC stablecoins. They will start with accepting payments on Solana, Ethereum, and Polygon. This is the first time Stripe is accepting crypto payments since 2018 when they stopped supporting Bitcoin because of its volatility.
In 2022, Stripe made its first attempt to enter the cryptocurrency market by offering payouts in USDC, but not actual payments. Twitter was highlighted as a major customer for this service. However, the recent news did not mention any specific customers.
John Collison, the co-founder and president of Stripe, will be sharing the news at the Connect developer conference happening this week in San Francisco.
Earlier on Thursday, he mentioned that transaction settlements are now taking much less time than Christopher Nolan films. Additionally, transaction costs are no longer as expensive as Christopher Nolan films’ budgets. Stripe is reintroducing crypto payments, this time using stablecoins for a smoother experience.
The company announced a series of new launches on Wednesday, with the most important update being that Stripe will now allow customers to integrate other payment providers with its financial services tools for the first time. Thursday’s announcement about expanding support for cryptocurrency is also part of their larger strategy to make their services more accessible to a wider range of users.
A quick overview of Stripe’s involvement with cryptocurrency highlights the delicate balance the company has had to maintain over the years. Despite being a disruptive force in the fintech industry, Stripe has been cautious about fully embracing cryptocurrency, wanting to stay engaged in discussions about how blockchain technology will impact financial services. However, delving too deeply into crypto could jeopardize its reputation as a stable and reputable financial institution. With $1 trillion in transactions processed last year and a current valuation of $65 billion, Stripe continues to experience growth in its core business.
Stripe is focusing more on embedded finance by separating payments from the rest of its services.
Stripe began exploring cryptocurrency in 2014 by conducting tests on Bitcoin, the original and most well-known cryptocurrency. One of the early partners involved in the testing noted the importance of Stripe’s support in this endeavor, highlighting that Bitcoin does not possess all the typical characteristics of traditional money.
In 2018, the company decided to stop engaging in Bitcoin-related activities due to their unpredictable and unstable nature. They stated that as block size limits were being reached, Bitcoin had shifted towards being more of an investment asset rather than a medium of exchange. This change made Bitcoin less practical for making payments.
In June 2019, Facebook started showing interest in cryptocurrency. Stripe joined as one of the initial members of the Libra project.
However, this support was short-lived. In October 2019, Stripe, along with other companies, withdrew their support for Facebook’s initiatives. Stripe expressed their belief in projects that help make online commerce more inclusive globally, recognizing that Libra had the potential to do so. Despite this, they decided to monitor Libra’s progress from a distance and consider working with the Libra Association in the future.
After three years, the company decided to once again experiment with cryptocurrency, this time using Twitter and stablecoin (USDC) for payouts.
Considering the extended observation, it is uncertain whether Stripe will continue with their recent launch and how long it will take for their efforts to show results. It seems that they are currently exploring other stablecoins and platforms and believe there is a potential opportunity, at least for the time being.