The Rise of Stablecoins and Stripe's Strategic Layout

Stablecoins are sweeping the global financial market, with a year-on-year growth rate exceeding 50%. The global transaction settlement volume is already more than twice that of a well-known credit card company. As one of the three major payment giants in the United States, a certain payment company has finally made a significant decision after frequently attempting cryptocurrency payments this year. It acquired a stablecoin API company that was only established two years ago for $1.1 billion, creating the largest acquisition case in the crypto industry to date.

Stablecoin: The "Killer Application" in the Web3 Space

A well-known venture capital institution's latest cryptocurrency report clearly指出 that stablecoins have become one of the most significant "killer applications" in the Web3 field. Thanks to the widespread use of smartphones and the implementation of blockchain technology, stablecoins are expected to become one of the greatest financial empowerment movements in human history.

Stablecoins greatly simplify the process of value transfer. Their quarterly trading volume is more than twice that of a well-known credit card company at $3.9 trillion, with annual settlement asset values reaching several trillion dollars, fully demonstrating their practicality. In addition, measured by daily active addresses, stablecoins account for nearly one-third of daily cryptocurrency usage at 32%, second only to decentralized finance (DeFi) at 34%.

According to a stablecoin report by a major payment giant, the total supply of stablecoins is approximately $170 billion. They settle assets worth trillions of dollars annually. There are about 20 million addresses conducting stablecoin transactions on-chain each month, with over 120 million addresses holding a non-zero stablecoin balance. This data indicates that stablecoins are forming a monetary system parallel to traditional financial infrastructure — and all of this started just five years ago.

Some surprising stablecoin statistics:

• Stablecoins have now become the sixth largest buyer of U.S. Treasury bonds.
• 30% of cross-border remittances are made using stablecoins.
• Several major payment companies are developing stablecoin projects.
• The global interbank financial telecommunications association and some sovereign countries are exploring the application of stablecoin payments.

The application of stablecoins in non-crypto fields is becoming increasingly prominent, such as remittances, cross-border payments, payroll distribution, trade settlement, and merchant settlements.

Acquired Company: Stablecoin API Engine

The acquired company is a stablecoin API engine that provides software tools to help businesses accept stablecoin payments. The company was founded by two experienced entrepreneurs who previously sold a payment company to a well-known tech company.

The company's core products include:

1. Coordination API: Integrate stablecoin payments into the existing business APIs of traditional companies, handling all compliance, regulatory, and technical complexities.

2. Issuance API: Helps users issue their own stablecoin and provides a 5% investment option in US Treasuries to improve capital utilization.

This API system, combined with the company's self-developed stablecoin cross-chain trading, fiat/cryptocurrency deposit and withdrawal acceptance, as well as virtual bank accounts provided through partner banks, can help traditional users use stablecoins for payments more conveniently, providing a smoother and seamless user experience.

The company stated that using its API, funds can be transferred globally within minutes, seamlessly sending stablecoin payments, converting local fiat currency into stablecoins, and providing global consumers and businesses with USD and EUR accounts, enabling users to save and spend in USD and EUR.

Although these features are not fundamentally huge innovations, the company's products make the interaction process for traditional users more convenient, which is its outstanding aspect.

The company has attracted numerous clients, including a well-known aerospace company. According to reports, this aerospace company uses the platform to collect payments in different currencies across various jurisdictions and transfers them to its global treasury via stablecoin.

In addition, the company has established partnerships with multiple blockchain networks and cryptocurrency payment applications to provide infrastructure for their stablecoin payment functionalities. A well-known cryptocurrency exchange has also adopted the company's services, supporting the transfer of stablecoins across different blockchains. According to statistics, the annual payment volume processed by the company has exceeded 5 billion dollars.

Prospects for Cooperation Between the Acquirer and the Target Company

This collaboration is essentially a continuation of the stablecoin rise story, and the integration of the two companies can further promote the acquirer's cryptocurrency payment strategy, allowing for easier handling of stablecoins and improving the transparency and security of transactions.

According to the latest official statement from the acquired party:

"We will work together to accelerate the adoption and utility of tokenized dollars, making it easier for everyone around the world to transfer, store, and spend currency.

When we launched the API 18 months ago, the world was very different from now. Many people were questioning the practicality of the entire digital asset space, and stablecoins were also affected. Regulators, banks, and fintech companies were either unable or unwilling to engage deeply with this new medium of exchange.

It was also from that time that some of the largest global financial institutions began to natively support stablecoins. Policymakers around the world are working to provide clarity and support for stablecoin infrastructure, recognizing the strategic importance of this technology to the current financial system.

Behind the scenes, the adoption and use of stablecoins are rapidly accelerating.

Shortly after its launch, several cross-border payment companies integrated our API, proving that stablecoins can be used to make global money flows faster and cheaper. We then partnered with government agencies to distribute aid funds, supporting thousands of frontline workers in Latin America. Subsequently, we established virtual accounts that enable fintech companies to allow global consumers and businesses to hold and spend dollars.

Through each use case, we have demonstrated to ourselves and to people outside the company that stablecoins can become the core global funding infrastructure, representing a brand new payment platform. This is not because consumers or businesses inherently want 'cryptocurrency', but because stablecoins solve key financial issues. They make it easier for funds to flow, more economical to hold, and cheaper to remit.

We share a common vision: our increasingly globalized world needs better currency. We need currency that can flow across borders; anyone from any country/region can use it freely; and it should be able to send remittances almost for free.

Moreover, it is crucial that we all believe that significant changes in financial services will not happen overnight. Change requires years of accumulation. Continuous improvement of products and platforms, as well as ongoing trust with customers, regulators, and partners.

The Acquirer's Cryptocurrency Layout

Previously, the acquirer announced the re-access of the cryptocurrency payment gateway for American merchants, allowing American merchants to:

1. Accept stablecoin payments from over 150 countries through multiple mainstream blockchains.
2. Enterprises/merchants can choose to receive payments in USD.
3. Integrate components for checkout acquisition, payment components, and payment intent API, and in the future, it will also support the company's subscription feature.

The acquirer became the first large payment company to offer Bitcoin payments in 2014. However, due to long confirmation times, high fees, and price volatility at the time, demand declined, and the feature gradually decreased in 2018.

In July this year, the EU company of the acquirer allowed users to purchase mainstream cryptocurrencies. In June, the acquirer also signed a cooperation agreement with a well-known cryptocurrency exchange to incorporate the exchange's Layer 2 solutions into its cryptocurrency payment products. At the same time, the exchange allowed users to use the acquirer's fiat currency to enter the cryptocurrency market, enabling users to purchase cryptocurrencies in their wallets.

The essence of the acquirer's business (whether it is acquiring or transferring) is: 1) the conversion between fiat currency and cryptocurrency; 2) cross-chain settlement of cryptocurrency/stablecoin.

Therefore, this acquisition can:

• Quickly fill in the functional requirements for related business.
• Better serve existing customers;
• Expanding beyond the existing system. The important clients of the acquired party include the US government, which means that the application of stablecoins has received official recognition.

Response to a Certain Payment Giant Issuing a Stablecoin

In August last year, a certain payment giant first issued its stablecoin on Ethereum, and in June this year, it launched the stablecoin on another mainstream blockchain. In addition to promoting it within its own ecosystem, the company is also actively driving the developer ecosystem for its stablecoin.

According to data statistics, in August of this year, the stablecoin accounted for 64% on a certain blockchain, while it only accounted for 36% on Ethereum. Its total market capitalization once reached 1 billion USD.

The payment giant previously published an article clarifying the evolutionary approach of stablecoin payments towards large-scale adoption:

• The introduction of concepts brings cognitive awakening
• Integrate to achieve payment utility
• Stablecoin payments are everywhere

Currently, stablecoin payments are in a critical transition from the second phase to the third phase.

Another payment giant is also a staunch supporter of Bitcoin, holding a large amount of Bitcoin and making multiple moves in the cryptocurrency space.

Conclusion

As an industry insider said, in the land of the blind, the one-eyed man is king. In the crypto space, the company with the most complex APIs and the widest network of relationships may be the leader. A well-known stablecoin issuer could be one of them, and the acquired company may also be among them.

This is just the beginning. Future mergers and acquisitions may be even more astonishing.