Stripe, the fintech giant, continues to return to the cryptocurrency market. On Thursday, the company announced that it would allow customers to accept payments in cryptocurrencies, starting with a single currency in particular, the stablecoin USDC, initially only on Solana, Ethereum and Polygon. This will be the first time Stripe has accepted payments in crypto since 2018, when it dropped support for Bitcoin because it was too volatile.
Stripe in 2022 tasted its first re-entry into the crypto market when it announced payments (but not payouts) in USDC, with Twitter as its customer for the service. Thursday’s news has no client names.
Stripe co-founder and president John Collison is set to announce the news at the company’s Connect developer conference this week in San Francisco.
“Trading arrangements are no longer comparable to Christopher Nolan movies by a long shot,” he said earlier Thursday. “And the transaction costs are no longer comparable to Christopher Nolan movies in terms of budget. Stripe is bringing back crypto payments — this time with stablecoins, which are a much better experience.”
On Wednesday, the company unveiled a long list of other releases, with the most significant update being that Stripe, for the first time, would allow customers to integrate competing payment providers with Stripe’s other financial services tools. Thursday’s nod to expand crypto support is also part of this larger strategy to open up its walled garden.
A brief timeline of Stripe’s dance with crypto highlights the difficult line Stripe has walked over the years when it comes to cryptocurrency. True to its disruptive fintech roots, the company wanted to be in the middle of the conversation about how blockchain-based technologies will impact financial services. However, it risks upending its larger businesses and positioning itself as a stable and rational financial force if it gets too deeply or too long involved in periods of volatility. The company processed $1 trillion in transactions last year, and it’s still growing. it is currently worth $65 billion on paper.
In 2014, Stripe began its first forays into cryptocurrency by testing Bitcoin, the first major cryptocurrency. “Stripe’s support is crucial here because of the nature of Bitcoin: It doesn’t have all the properties typically expected of money,” one of its early testing partners said at the time.
By 2018, he withdrew all this activity, saying it was too unstable and volatile. “Over the past year or two, as block size limits have been reached, Bitcoin has evolved to be more suited to being an asset than a medium of exchange,” the company said in its announcement. “This led to Bitcoin being made less useful for payments.”
Cue June 2019 and Facebook is warming up to crypto. Stripe became one of the founding members of Libra.
But not for long! By October 2019, Stripe, along with others, stopped supporting Facebook’s efforts. “Stripe supports projects that aim to make online commerce more accessible for people around the world. Libra has this potential,” he said at the time. “We will closely monitor its progress and remain open to working with the Libra Association at a later stage.”
It took another three years for the company to try crypto again, in turn with Twitter and stablecoin (USDC) payments with Twitter.
Given this larger showing, it’s anyone’s guess whether Stripe will stay the course with this latest release and what kind of timeline its efforts will take. From what we understand, however, he is already evaluating other stablecoins and platforms and sees an opportunity, at least for now.
