Stripe's vision of crypto payments
Despite lofty promises, crypto-based payments have so far been a disappointment, overshadowed by the growth in exchanges, NFTs and DeFi. That may be changing.
Driving the news: On Friday, Stripe launched a pilot program for crypto payouts, allowing customers to pay their users in USDC stablecoins.
Why it matters: It's a sign that payments darling Stripe is once again seeing a future in using crypto to speed up and lower the cost of transactions.
Flashback: Stripe, back in 2018, ended support for bitcoin payments due to the high fees and extreme volatility.
- The company has since reentered the crypto market, but had yet to unveil a product that would use tokens for payments — until today.
Between the lines: Today's post hints that Stripe sees crypto as potentially a superior way to transfer money, especially across borders.
- Stripe's Connect product operates in 70 countries, but many "remain out of reach in part due to the intrinsic complexity involved in supporting heterogeneous local payments systems," Stripe product manager Karan Sharma wrote in a blog post.
- "While the 'store of value' aspects of cryptocurrencies typically receive the most attention, we view the prospect of 'open-access global financial rails' as being at least equally compelling," he continued. Stripe plans to have crypto payouts in 120 nations by the end of the year.
- Stripe is now using USDCs issued by Circle to mitigate the volatility issue, and a Layer 2 chain — Polygon — to address the cost problem. The company says it will add more cryptocurrencies and rails with time.
Of note: Twitter (yes, the one that Elon Musk is currently trying to take private) will be the first to use the payment method, allowing some users to take earnings via USDC.
The bottom line: Crypto is becoming a way for Stripe to expand abroad.