Payment company Stripe acquires crypto wallet provider wallet Privy, accelerating AI and stablecoin utility
- Stripe's acquisition of crypto wallet provider Privy builds on the purchase of Bridge, a company specializing in stablecoin infrastructure.
- Stripe's new product suite has been designed to boost businesses harnessing AI and stablecoins to accelerate growth.
- Stripe is set to expand its newly launched Stablecoin Financial Accounts and stablecoin management tools to businesses globally.
Stripe Inc., the Irish-American multinational providing financial services and software for processing payments, has acquired Privy, a crypto wallet provider, as part of a larger mission to establish stablecoin infrastructure and ecosystem.
Stripe advances stablecoin infrastructure with Privy's acquisition
Bloomberg first reported the acquisition of New York-based Privy, a company founded in 2021. Privy provides support to businesses integrating crypto wallets into their platforms to enhance the user experience.
OpenSea, the leading non-fungible token (NFT) marketplace, is one of the crypto companies utilizing Privy's infrastructure. By integrating Privy, OpenSea significantly improved the user experience, eliminating the need for users to create an external wallet on platforms such as MetaMask or Coinbase.
Henri Stern, co-founder and CEO of Privy, said in a statement that before his firm's inception, "developers had to send users off-platform to get started, breaking flows and killing user conversion. That friction fundamentally constrained what could be built in crypto."
Privy recently raised over $40 million in a funding round led by Ribbit Capital, Definition and Coinbase Ventures. The company currently boasts a valuation of over $230 million as of March, according to data provided by Pitchbook.
Stripe's decision to acquire Privy follows the $1.1 billion acquisition of Bridge, a stablecoin infrastructure platform, and hopes to combine the unique capabilities of both entities "to enable a new generation of global, Internet-native financial services," Patrick Collison, Stripe's co-founder and CEO, said in a statement.
Stripe unveils the world's first AI foundation for payments
Stripe recently unveiled strategic products tailored to meet the needs of businesses harnessing the power of artificial intelligence (AI) and stablecoins to accelerate growth. This infrastructure is powered by the first-of-its-kind AI foundation model specifically built to support payments, money management tools and stablecoin-powered accounts.
"There are not one, but two, gale-force tailwinds, well off the Beaufort scale, dramatically reshaping the economic landscape around us: AI and stablecoins," Collison said during Stripe's annual user event on May 7. "Our job is to pull these technologies forward so businesses on Stripe can benefit from them right away," he added.
Stripe announced that it will deploy the AI foundation model across its payment suite to enable users to unlock additional capabilities and enhance their services. The launch of the Stablecoin Financial Accounts introduced new money management capabilities supported by various stablecoins. Businesses across 101 countries are expected to tap into the new services, allowing for the sending, receiving and storing of both stablecoins and fiat currencies, such as ACH and SEPA.
"Stripe will start by supporting two dollar-denominated stablecoins – USDC and Bridge's USDB – and plans to add others over time," the company said in a press release.
Stripe's interest in stablecoins comes amid significant progress with the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act in the United States (US) legislative process.
A motion passed 69-31 in the Senate, advancing the bill toward a final vote on May 21. The Senate is currently deliberating and negotiating amendments to address key areas of concern, particularly those raised by Democrat lawmakers, such as strengthening anti-money laundering (AML) guidelines, consumer protection and political interests.
The GENIUS Act would represent a significant step toward regulating stablecoins in the US and potentially set a precedent for other countries. The stablecoin sector boasts a market capitalization of $254 billion, with Tether's USDT leading with a market share of $155 billion.
Cryptocurrency prices FAQs
Token launches influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.
A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.
Macroeconomic events like the US Federal Reserve’s decision on interest rates influence crypto assets mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.
Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs.
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