Illustrative image of two commemorative bitcoins with a green background.
Artur Widak | Nurfoto | Getty Images
Stripe will let businesses pay their users via cryptocurrency, starting with Twitter, in the latest sign of how big financial firms are warming up to the digital asset.
The $95 billion online payments company said on Friday that it will begin offering merchants the ability to make crypto payments through the stablecoin USDC, which is issued by crypto firm Circle. Stablecoins are tokens that are pegged to fiat currencies to maintain a stable price. In the case of USDC, as the name suggests, the cryptocurrency is backed by the US dollar.
Twitter will be the first company to integrate the new payment method. Starting Friday, the social media platform — which has been the subject of much discussion recently over a potential acquisition by Tesla CEO Elon Musk — will allow a certain number of creators to take their profits from features its paid with tickets and Super Follows in USDC.
It’s Stripe’s first major push into crypto since dropping support for bitcoin four years ago. The San Francisco-based startup stopped accepting bitcoin payments in January 2018, citing the digital currency’s reputation for volatile price swings and inefficiency in conducting day-to-day transactions.
But the firm has since warmed to crypto amid hype over “Web3,” a movement in technology that seeks to create a decentralized version of the Internet based on blockchain technology. Stripe last year formed a dedicated team to explore crypto and Web3. In November, Stripe co-founder John Collison hinted that the firm may soon offer crypto support again.
“While the ‘store of value’ aspects of cryptocurrencies typically get the most attention, we see the prospect of ‘open access global financial binaries’ as at least as compelling,” said Karan Sharma, product manager in the crypto unit of Stripe. a blog post on Friday. “As a result, we’ve been exploring ways to use cryptocurrency-based platforms to unlock broader access.”
The company’s crypto payments feature will run on the Polygon network, a so-called “Layer 2” solution that sits on top of the Ethereum network to handle transactions faster and at a lower cost. Bitcoin, ether and other cryptocurrencies have faced criticism for slow transaction times and high fees.
“We plan to add support for additional rails and payment currencies over time,” Sharma said.
Stripe isn’t the only company opening its platform to digital currencies — in fact, the company is probably late to the party. Visa, Mastercard and PayPal and other major payment processors have all announced their moves into the space. This was when digital currency prices were still rising.
Recently, several major cryptocurrencies have fallen sharply from record highs, with bitcoin, the world’s largest, down more than 40% from a November peak of nearly $69,000. Bitcoin was trading at around $39,724 on Friday, according to data from Coin Metrics, down about 6% in the past 24 hours.
