In the latest indication of how large financial firms are warming to digital assets, Stripe will allow firms to pay their consumers in cryptocurrencies, including Twitter.
Stripe, the $95 billion online payment provider, announced Friday that it will enable businesses to make payments in crypto via its USDC stablecoin, which is created by crypto company Circle. Stablecoins are cryptocurrencies that are linked to fiat currencies to ensure stability. In the case of USDC, as the name implies, the cryptocurrency is backed by the US dollar.
The cryptocurrency will be the first to integrate the new payment method. Starting on Friday, Twitter, which has been the focus of a lot of attention lately due to rumors that Tesla CEO Elon Musk may buy it, will enable a limited number of creators to withdraw earnings from its paid Ticketed Spaces and Super Follows features in USDC.
It’s Stripe’s first major crypto push since they stopped accepting bitcoin four years ago. In January 2018, the San Francisco-based start-up abandoned bitcoin payments due to the currency’s reputation for wild price fluctuations and issues with making routine purchases.
However, after being unenthusiastic about crypto in 2018, the company has warmed to it since there’s been a lot of hype over “Web3,” a movement in technology that advocates for the creation of a decentralized internet based on blockchain technology. Last year, Stripe formed a group dedicated to researching cryptocurrency and Web3.
“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,” Karan Sharma, product manager at Stripe’s crypto unit, said in a blogpost Friday. “As a result, we’ve been exploring ways to use cryptocurrency-based platforms to unlock broader access.”
Polygon will use the Polygon network, which is a so-called “Layer 2” solution that sits on top of the Ethereum network to speed transactions and minimize costs. Bitcoin and other cryptocurrencies have been criticized for their slow transaction speeds and exorbitant fees.
“We plan to add support for additional rails and payout currencies over time,” Sharma said.
Stripe isn’t the only firm to open its platform to digital currencies — in fact, it’s arguably tardy to the trend. Visa, Mastercard, and PayPal and other major payment processors have all made similar announcements in the past when bitcoin prices were still climbing.
The last year has seen several prominent cryptocurrencies plunge sharply from peak to trough, with bitcoin, the world’s largest cryptocurrency by market capitalization, falling more than 40% from its November high of almost $69,000. Bitcoin was trading at around $39,724 on Friday, according to Coin Metrics data, down about 6% in the last 24 hours.