Stripe acquires Privy to further improve stablecoin infrastructure layout

On June 12, US payment giant Stripe announced the acquisition of Privy, a popular embedded wallet infrastructure provider that helps platforms like Hyperliquid, OpenSea, Blackbird, and Toku embed crypto wallets directly into the user experience, eliminating the complexity of user operations and increasing conversion rates.

Stripe is a payment platform that serves half of the Fortune 100 and 78% of the Forbes AI 50. Last year, Stripe processed $1.4 trillion in payment transactions, a year-on-year increase of 38%. Revenue processed on Stripe is growing seven times faster than that of S&P 500 companies, giving the platform a huge influence in the mainstream business sector. In other words, Stripe is the ideal choice to promote the development of stablecoins.

For Stripe, which is well versed in the secret code of capital flow, this acquisition is another big bet on the stablecoin market after it spent 1.1 billion US dollars to acquire the stablecoin service provider Bridge in October last year. On the surface, this acquisition shows that Privy can help Stripe expand its wallet account capabilities on the chain. Behind it, it may be a game with banks and compliance, but this does not hinder the huge potential of Web3 payment.

1. Privy Crypto Wallet Service Provider

Privy was founded in 2021 with the goal of making it easy for any developer to build better products based on encryption technology (Unlock Crypto Rails). Whether cryptocurrency is the core function of the application or just an additional function, an excellent encryption product should make users feel easy to use and convenient.

This is the original intention of Privy, which is committed to making cryptocurrency easy to use so that more people can benefit from it.

It all started with building a better wallet.

Market pain point: Wallets are an essential and scalable interface for owning and exchanging value online, and they should have the same level of craftsmanship as any Internet application. However, when Privy first started, although early crypto wallets were powerful, their use threshold was extremely high and limited to advanced users.

"Developers have to get users off the platform to start using crypto services... This complexity fundamentally limits the types of products that can be built. It not only hinders the user experience, but also reduces user conversion rates. At the same time, this resistance fundamentally limits the development of the cryptocurrency field.  " 

-Henri Stern, Privy CEO & Co-Founder

( privy.io)

Solution: Privy

Privy is designed to eliminate this complexity, abstracting away complex technical details so that users can have an experience similar to the rest of the Internet when using crypto products: simple and easy to use; intuitive and convenient; instant response.

Privy provides an easy-to-use API and SDK that allows developers to embed crypto wallets directly into their applications. Unlike relying on standalone wallets such as Metamask or Phantom, Privy allows developers to embed wallets directly into their applications, whether they are marketplaces, games, or fintech platforms.

Use Case: Today, Privy has supported more than 75 million accounts from more than 1,000 development teams and facilitated billions of dollars in transactions between wallets, applications, and users, allowing users to easily earn, transfer, and use new assets online, such as:

- Hyperliquid: Creating a new type of trading experience platform.

- Blackbird: Helping restaurants accept digital assets from loyal diners.

- Toku: Enabling global teams to get paid in instant digital dollars.

- Farcaster: Building the social graph of the future on top of crypto.

Privy's initial insight was clear and underestimated: the wallet is the gateway to cryptocurrency, but this gateway is broken. Privy changed this by pioneering an embedded wallet, making using cryptocurrency feel as seamless as logging in with an email.

Since Paradigm led the investment in 2023, Privy has grown from 1M wallets + 41 customers to now supporting wallet processes for top teams like Hyperliquid, Jupiter and Blackbird, quietly reshaping the way billions of dollars flow online, covering trading platforms, digital banks, remittance platforms and payment applications.

——Caitlin, Paradigm Investment Partner

Financing Overview: Privy was previously valued at $230 million, but discussions on X suggest that its valuation has reached 10 figures. Previous investors include: Sequoia, Ribbit Capital, Paradigm, Blue Yard, Coinbase Venture, Archetype, Electric Capital, Protocol Labs.

It will continue to operate independently after the acquisition by Stripe. Like the acquired Bridge, independent operation means that Privy can be more flexible and easier to launch more features, provide users with better services, and focus more on its core business and user needs.

Second, strategic synergy between Privy and Stripe

In its 2024 annual letter, Stripe made a bold statement: "The Stripe platform will be the best way to build stablecoin applications." This acquisition shows that they are rapidly executing on this roadmap.

The funds have to be stored somewhere, and Privy builds the world's highest quality programmable treasury. In addition to our other stablecoin-related work, we look forward to helping the birth of a new generation of global, Internet-native financial services.

——Patrick Collison, Stripe CEO

2.1 Privy for Stripe

Privy is more than just a set of APIs. It is a battle-tested product with a Stripe-like developer experience, a customer-centric team, and strong credibility in the crypto builder ecosystem. Industry insiders consistently emphasize its execution quality.

Like other Internet giants’ self-developed technologies, although some may think that Stripe can develop this feature on its own, this misses the point: developing the first version is easy, but perfecting the details—handling edge cases, adapting to customer needs, and supporting production workloads—is not easy.

Of course, this is not just a technology acquisition. Stripe chose to acquire to gain market responsiveness, brand credibility, and product-market fit, in conjunction with the integration of more stablecoin businesses into Bridge.

Stripe has acquired:

• a first-class team with native cryptocurrency product genes;

• developer-centric embedded wallet platform;

• a broad native cryptocurrency customer base;

• momentum now, not 18 months later.

As Dr. Xiao Feng of Hashkey clearly stated: blockchain is the next generation of financial infrastructure.

This is critical, but I want to make it clear that blockchain is based on the Internet, and speed is crucial in the battle for the Internet.

More importantly: the Internet has network effects.

In the battle for the next generation of finance, Stripe is accelerating, and Privy can help them achieve this goal faster, while others are still discussing how to issue stablecoins.

2.2 Stripe to Privy

For Privy, Stripe has brought a huge improvement in both business coverage and resources:

• A wide distribution channel for a large number of financial technology and enterprise developers;

• A reputation for reliability and compliance around the world;

• Capital and support to continue to operate independently.

2.3 Bridge: Backend support for stablecoins

Bridge, which Stripe acquired for $1.1 billion in October 2024, provides three core services that developers can access with just a few lines of code:

• Stablecoin orchestration function: enables companies to transfer, store and accept various types of stablecoins, while Bridge is responsible for compliance and regulatory requirements.

• Currency acceptance function: enables companies to exchange local fiat currencies for stablecoins.

• Transfer function: Support global fund flow and account creation in USD and EUR.

Bridge's actual application scenarios are already quite extensive. SpaceX, through its parent company Starlink, uses Bridge to remit revenue earned in Argentina back to the United States in USD. Nigerian users pay for YouTube Premium and ChatGPT through Bridge's orbit, while small businesses in the United States can accept global stablecoin payments without worrying about the complexity of international banks.

Since the acquisition, Bridge has grown rapidly, and its stablecoin financial accounts are now operating in 101 countries, allowing businesses to hold balances in USDC and USDB (Bridge's stablecoins) while receiving funds through traditional banks and crypto networks.

In addition, Bridge recently launched the world's first stablecoin card issuance product in cooperation with Visa. Through this collaboration, fintech and crypto companies such as Ramp, Squads, and Airtm have begun issuing Visa cards directly linked to stablecoin wallets, allowing cardholders to spend their stablecoin balances at 150 million merchants around the world that accept Visa.

3. After Stripe integrates Bridge and Privy

3.1 Full adaptation of the Fiat & Crypto stack

For Stripe, Privy and Bridge's existing features form a perfect complement to its stablecoin strategy. Privy transforms the on-chain wallet infrastructure required for stablecoin payments into a plug-and-play feature similar to Stripe, providing on-chain support for all of Bridge's existing custodial stablecoin services.

In other words, Stripe now provides tools at every level of the Fiat & Crypto stack:

Bridge is responsible for providing compliant fiat on/off channels (through leading banks) and stablecoin account custody and payment channels for customers from more than 100 countries;

Privy is responsible for hosting non-custodial addresses for stablecoins and handling the complexity of on-chain wallets;

All through Stripe-level developer experience, and through its existing channels and markets, full access to stablecoin crypto payment rails.

Most people will miss the true meaning of this combination: Stripe can provide users with crypto wallets in any market (Privy), any fintech company can add stablecoin accounts (Bridge), and any platform can settle globally in seconds (Stablecoin, USDB), all through APIs that developers already trust (Stripe).

3.2 Opening the on-chain financial market through Privy

Before Privy, both Stripe's payment network and Bridge's stablecoin payment network (which still requires deposits and withdrawals through bank accounts) relied on custodial bank accounts. Bank accounts mean supervision, compliance, high fees and restrictions.

Once more stablecoin businesses are connected, due to the pressure of regulatory compliance, both stablecoin businesses and custodial accounts will be greatly restricted by banks, corporate internal control compliance and supervision. By acquiring Privy, on the one hand, we can conduct stablecoin business through Privy's independent entity, and on the other hand, we can also achieve compliance flexibility, cost control, and business-level possibilities through self-hosted wallets.

This provides Stripe with more possibilities for stablecoin innovation, especially in emerging markets and global fintech:

• Open stablecoin accounts and settlements for offline merchant acquirers at a controlled cost;

• Create multiple wallets for online e-commerce sellers to manage;

• Seamlessly create wallets for consumers to use for encrypted payments;

• Provide convenience for access to democratized yield products on the chain;

The encrypted payment track behind convenient cross-border remittances within the APP.

The changes here are:

Fiat to stablecoin (Bridge) - More stablecoin scenario construction (Stripe) - Stablecoin on-chain self-custody (Privy) - A programmable, permissionless world on the chain.

What will happen after 3.3?

What is missing in this stablecoin world built by Stripe? Stripe is expected to continue to complete the puzzle in three directions:

Digital asset licenses: Although Stripe already has most of the fiat currency payment licenses, the emerging digital asset licenses will make its stablecoin and cryptocurrency services more extensive worldwide.

More non-US dollar payment channels and deposit and withdrawal currency acceptance channels: Bridge recently added Mexico, and more local payment channels will consolidate its global infrastructure advantages.

On-chain financial services: Stripe may embed credit, lending, and even cryptocurrency transactions in its API-driven business account services - similar to Revolut Business.

Through these initiatives, Stripe will provide a programmable, borderless financial stack, forming a scalable, global on-chain financial market at a fraction of the cost of traditional banks.

Fourth, write in the end

Stripe's cryptocurrency journey spans more than a decade of ups and downs. The company tested Bitcoin payments in 2014, but stopped supporting it in 2018 due to price volatility issues. In 2019, Stripe joined Facebook's Libra project (which later spawned Sui and Aptos), but then withdrew.

Now, with Privy taking care of wallet infrastructure and Bridge providing stablecoin backend services, Stripe has mastered both ends of the stablecoin stack. Historically, stablecoin adoption has been limited by infrastructure gaps - businesses wanting to accept crypto payments have struggled to onboard users, while users wanting to pay with crypto have faced wallet complexity.

But now, Stripe can remove those barriers for them, bringing an end to the dial-up days of crypto integration.

This could be a potential turning point for stablecoin adoption. Stripe's influence extends far beyond crypto-native apps to mainstream commerce, enterprise software, and global marketplaces. By making stablecoin API integration as easy as adding a payment method, Stripe has the potential to accelerate cryptocurrency adoption in what is still a niche market, driving Crypto Mass Adoption.