a16z: What Stripe's acquisition of Bridge means for fintech and stablecoins

Author: James da Costa & Sam Broner, a16z crypto; Translation: Jinse Finance xiaozou

In February of this year, Stripe completed its acquisition of the stablecoin platform Bridge—this is the company's largest acquisition to date. Previously, Stripe reopened cryptocurrency payment services to U.S. businesses last year. In the broader context, after several years of growth in stablecoins, this acquisition marks the first public acknowledgment in the payments industry that stablecoins are moving toward the mainstream. The settlement amount for stablecoins in 2024 is expected to reach $15.6 trillion, with transaction volumes now on par with Visa.

What is a stablecoin? A stablecoin is a type of cryptocurrency that is pegged to the value of fiat currency (typically the US dollar). The most common type is the "fiat-backed stablecoin" (such as USDC issued by Circle), which is fully backed 1:1 by short-term U.S. Treasury bonds and bank deposits.

In the past year, stablecoins have gained significant adoption in the following regions: countries with high local currency volatility (such as Nigeria and Argentina); areas with high cross-border remittance costs (such as Colombia); and markets with low acceptance of international credit cards (such as Pakistan). Stablecoins enable users to: store asset value in USD; achieve fast and cheap global transfers; and make purchases on international websites that support stablecoins (when local bank card payments are not applicable).

Both street-side shops and multinational enterprises can benefit from stablecoins. Stripe CEO Patrick Collison referred to it on Twitter as "the room-temperature superconductor of financial services" and predicted that "in the coming years, global companies will enjoy the speed, coverage, and cost advantages brought by stablecoins." Bridge, as a developer-first payment company (similar to Stripe's philosophy), enables stablecoin conversion in any dollar format through a single API, primarily offering three major services:

Capital Allocation: Developers can transfer, store, and receive stablecoins with just a few lines of code, while the Bridge handles all compliance requirements and technical complexities.

Issuance Service: Developers can create their own stablecoins in minutes, and the Bridge will invest the reserves in US Treasury bonds and share the profits with the developers.

Global Remittance: Provides cross-border transfer and USD/EUR account services for developers' end users.

Current use cases include: Starlink is repatriating funds from Argentina through Bridge; Nigerian users are using stablecoins to pay for YouTube Premium and ChatGPT; small businesses in the United States are receiving payments from global customers.

This acquisition aligns with Stripe's mission to "expand the total internet economy." Specifically, stablecoins bring dual advantages to Stripe: first, in regions with weak payment infrastructure (i.e., markets where Stripe has limited coverage), stablecoins can reduce cross-border costs, lower transaction failure rates, and improve conversion rates; second, they provide merchants with a more economical payment option than credit cards. In 2024, Stripe's processed amount is expected to grow by 38% to $1.4 trillion, and the addition of Bridge is anticipated to drive a new round of global expansion through stablecoins.

From a more macro perspective on fintech, we believe that the popularization of stablecoins faces three major obstacles: the global regulatory framework is still unclear (although it is rapidly improving); user experience remains cumbersome (traditional banking channels are insufficiently covered); and certain trust issues delay the speed of adoption. However, a16z partner Chris Dixon pointed out that stablecoins can "reset" the current closed and fragmented global financial system, referring to it as the "WhatsApp moment for money"—just as email revolutionized communication, stablecoins will enable open, instant, and borderless value transfer for the first time.

In addition to scenarios such as cross-border payments, stablecoins also provide new possibilities for AI agents to break through the limitations of traditional financial infrastructure. For example: when an AI agent needs to make a payment on behalf of a user, whose card or wallet should be used? Who authorizes the transaction? How is the risk assigned? How do AI agents settle directly with each other? With the inherent programmability of blockchain, stablecoins can address these issues through features such as budget rule settings, conditional trigger payments, and micropayments. Stripe's existing AI agent toolkit already supports the creation of one-time virtual cards for e-commerce transactions (Perplexity is using it for autonomous shopping experiences), while stablecoins will become a more suitable alternative or extension solution.