Following progress toward its stablecoin initiative, Stripe has decided to acquire crypto wallet provider Privy.
While Privy is not currently a major player in the crypto wallet sector, it boasts 75 million user accounts and partnerships with platforms such as trading site Hyperliquid and NFT marketplace OpenSea.
Privy’s technology enables its clients to develop embedded crypto wallets directly within their systems. The acquisition—details of which have yet to be revealed—should significantly broaden Privy’s reach within the market.
Despite becoming part of Stripe, Privy will continue to operate independently as a product. In a social media update, Privy highlighted the shared vision with Stripe for bringing crypto and fiat closer together to transform digital value transfers.
Crypto Progress and Setbacks
The acquisition marks Stripe’s ongoing investment in the digital assets sector, coming after its substantial purchase of stablecoin issuer Bridge. Following that deal, Stripe initiated overseas tests of its own dollar-backed stablecoin.
This launch follows a series of both successes and challenges for Stripe within the crypto space. The company made initial moves into bitcoin payments years ago but encountered difficulties due to the complexity involved in processing cryptocurrencies. Additionally, Stripe has been working on launching a stablecoin for more than a decade.
Embracing Stablecoins
Momentum is building for Stripe as it partners with Coinbase to enable users to receive payouts and convert fiat into stablecoins like Circle’s USDC and Pax Dollar. The introduction of its own stablecoin will place Stripe in the highly competitive $250 billion market.
Competitor PayPal has already taken an early lead by launching PYUSD two years ago, although it hasn’t yet achieved significant market share. Nevertheless, PayPal is relying on its extensive customer base and strong relationships with institutional investors to boost its stablecoin’s visibility.
Stripe aims to leverage its robust customer base in a similar manner, differentiating itself through enterprise-grade, compliant products. The integration of an embedded crypto wallet is expected to strengthen Stripe’s position in the digital assets space.