Interest Grows in Stablecoin Acquisitions
About a year after Stripe’s $1.1 billion acquisition of stablecoin startup Bridge, Coinbase and Mastercard are now exploring their own acquisition of BVNK, a London-based stablecoin company. This information comes from six sources close to the negotiations who requested to remain anonymous due to the sensitive nature of the discussions.
No final decisions have been made yet regarding the terms or the eventual buyer, but estimates for the sale range between $1.5 billion and $2.5 billion. Interestingly, some insiders believe Coinbase might have a stronger position in these talks compared to Mastercard.
If a deal materializes, it would mark the largest stablecoin acquisition to date and signify that stablecoins—virtual currencies linked to assets like the U.S. dollar—are becoming mainstream in the financial world. Should BVNK opt to partner with Mastercard, it’s worth noting that the company’s stock had a dip back in June. This situation underlines the seriousness with which large companies like Amazon and Walmart are taking the rise of stablecoins.
None of the parties—BVNK, Mastercard, or Coinbase—chose to offer comments on the situation.
The Rise of Stablecoins
Founded in 2021 by Chris Harmse, Jesse Hemson-Struthers, and Donald Jackson, BVNK facilitates the use of stablecoins for various business transactions, including cross-border payments and global government bonds. Recently, the startup raised $50 million, giving it a valuation around $750 million, led by Haun Ventures with input from Coinbase Ventures and current investor Tiger Global. Other notable recent investors include Visa and City Ventures.
Despite its growing stature, BVNK’s valuation still falls short of Bridge’s, which was acquired by Stripe earlier this year. Hemson-Struthers has previously labeled BVNK a “world leader” in stablecoin infrastructure, highlighting its robust banking relationships and financial licenses. Bridge has gained traction in the mainstream since its acquisition, creating products like Open Issuance, which lets companies issue their own stablecoins. However, if BVNK is acquired, it could alter the landscape that last year’s deal established.
While stablecoins have been a part of the cryptocurrency scene for over a decade, they aim to maintain stable values, distinguishing them from more erratic cryptocurrencies like Bitcoin and Ethereum. Advocates argue that stablecoins offer quicker and more affordable transactions compared to traditional payment systems. They enable users to transfer tokens almost instantly with minimal fees, eliminating the lengthy wait times associated with standard wire transfers. Companies like BVNK play a crucial role in facilitating conversions between stablecoins and fiat currencies, like the U.S. dollar.
Since the start of the year, stablecoin startups have attracted considerable venture capital, especially with events such as Circle’s public debut in June and the passing of the Genius Act, targeting a specialized regulatory approach to cryptoassets.
The emergence of stablecoins has led traditional financial institutions, including Mastercard, to reassess their positions. Mastercard’s stock faced additional challenges following the Senate’s approval of the Genius Act.
Yet, Mastercard officials are downplaying the potential disruption from stablecoins. Raj Seshadri, the chief commercial payments officer, remarked that they believe most transactions will continue to start and conclude in fiat currency, adding that stablecoins may only be necessary in specific use cases.
