- Payment processor Stripe announces the introduction of cryptocurrency functionality for payments.
- Payments will use USD Coin on the Ethereum, Solana and Polygon blockchains.
Stripe Returning to Crypto Payments With Stablecoin
The major payment processor, Stripe, has announced that it is returning to crypto payments using USD Coin (USDC).
Transactions will initially be limited to the Ethereum, Solana and Polygon blockchains.
Stripe disabled its groundbreaking Bitcoin functionality 6 years ago due to performance issues.
As a major payment processor, Stripe’s return to crypto will have a significant impact on the broader adoption of crypto as a form of payment.
Stripe’s Crypto Payment Return Helps Thaw Icy Merchant Reception
The enormous transactions market, with its high fees for traditional payment processing, is ripe for crypto-led innovation.
Distributed digital ledger technology has the potential to reduce costs and eliminate cumbersome intermediaries in global transactions.
However, crypto has so far received an icy reception from merchants.
Part of the issue was the poor state of the technology when crypto transactions were first offered to merchants.
However, the much larger problem is that the vast majority of people still do not own any crypto to transact with.
Stripe’s incorporation of stablecoin functionality will go a long way toward normalizing crypto payments and encouraging consumers to take the first step of owning crypto for the purpose of transactions.
Progressive Crypto Integration Starts With Stablecoins
Stripe is a big player in the global transactions market, with over $1 trillion in total payment volume in 2023.
Therefore, Stripe’s re-introduction of crypto payments is going to have a significant impact on the market.
Stripe’s reasons for dropping the initial 2014 Bitcoin functionality were long transaction times, a high failure rate and transaction fees that were barely better than those of traditional payment processors.
The Ethereum, Solana and Polygon blockchains are next-generation blockchains that address all of these issues.
The other major source of crypto adoption hesitancy is the highly variable prices of many cryptocurrencies.
Stripe’s use of a stablecoin is a direct response to this significant barrier to adoption.
Stripe’s History of Crypto Payment Commitment
Stripe has a long history of attempting to incorporate crypto into its payment processing business.
Stripe’s management strongly believes that crypto is the future of transactions and wants to pioneer the transition.
However, they must balance this vision with an awareness of the state of crypto adoption and Stripe’s reputation as a secure and stable payment processor.
Stripe’s first venture into crypto was using Bitcoin (BTC) in 2014.
It later removed all Bitcoin functionality in 2018 due to transaction instability and price volatility.
In 2019, Stripe became a founding member of Libra, a Facebook-led attempt to establish a stablecoin.
However, it soon abandoned the project due to Libra’s failure to live up to its promised performance.
Finally, in 2022, Stripe enabled crypto payouts for content creators on Twitter, which was well-received.
“Crypto is finding real utility. With transaction speeds increasing and costs coming down, we’re seeing crypto finally making sense as a means of exchange.”
John Collison, Stripe President and Co-Founder, stated.
Stripe Positioned to Dominate Inevitable Crypto Payment Revolution
Stripe’s incorporation of the USD Coin stablecoin on the Ethereum, Solana and Polygon blockchains is perfectly aligned with its long-term strategy for the cautious and gradual normalization of crypto in payment processing.
Stripe knows that crypto suffers from poor understanding among the masses, so they have an appropriate strategy of slow incorporation using the safest and most user-friendly platforms.
This is a smart bet, as crypto is the inevitable future of payment processing.
Payment processors with popular crypto functionality will be poised to dominate the transactions market when this inevitable shift occurs.
Expect to see additional functionality gradually rolled out as each previous crypto feature becomes an everyday part of global transactions.
