Bridge Raises $58m To Build Global Stablecoin Network For Payments

According to reports, Zach Abrams and Sean Yu, two former executives of Square and Coinbase, co-founded the international stablecoin payment network Bridge, which has garnered $58 million in investment.

Bridge has raised capital from several investors, including Sequoia, Ribbit, and Index. The company aims to create a worldwide payment network centered around stablecoins to compete with established payment methods like credit cards and Swift.

Bridge wants stablecoins to be the new global payments rail — and the startup founded by two Square and Coinbase vets has $58 million in funding from big hitters including Sequoia, Ribbit, and Haun Ventures:https://t.co/jlElawJi0S

— Leo Schwartz (@leomschwartz) August 29, 2024

As reported by Fortune, Sequoia and Ribbit recently contributed $40 million to Bridge’s $58 million in prior secret investments. SpaceX and Coinbase make up Bridge’s current clientele. In an interview with Fortune, Abrams stated, “Fintech is deeply rational. If you can do something faster, cheaper, and more economical, you win.”

The $58 million fundraising round includes a previously undisclosed $40 million investment led by Sequoia and Ribbit. With $58 million in financing, Bridge hopes to broaden its customer base and enhance its stablecoin offerings. The company has already started forming strategic alliances, including one with Bitso to use stablecoins to facilitate cross-border payments between businesses in Latin America.

Integrating stablecoin transactions into financial systems

Bridge’s platform aims to facilitate incorporating stablecoin transactions into existing financial systems. The organization’s two main services are issuance and orchestration.

The Orchestration service offers APIs that make it simple for customers to convert between several dollar forms, including USD, EUR, USDC, PYUSD, and USDT. This service guarantees minimal costs, quick settlements, easy cross-border payments, and currency conversions.

Abrams states,

“We built Bridge as a low-level set of APIs that would enable companies to use a stablecoin rail without thinking about it.”

However, developers may create a bespoke stablecoin by converting these currency types using the Issuance API. This adaptability enables companies to provide digital dollar-based services catered to their requirements.

Bridge wants to enable businesses to easily incorporate stablecoins into their operations with the help of these services, making payment systems more effective and affordable.

The rise of stablecoins

Stablecoins have grown tremendously over the last two years; Tether, the market leader, is valued at over $118 billion, while USDC is valued at $34 billion. However, the asset class has also had to deal with events that have raised doubts about whether it is “stable.”

The collapse of TerraUSD in 2022—a so-called algorithmic stablecoin that relied on a correlated cryptocurrency rather than a fiat reserve to maintain its $1 peg—sparked a larger crypto crisis that resulted in congressional hearings and regulatory probes. As it was revealed that its issuer, Circle, had placed billions of dollars worth of reserves with the failing Silicon Valley Bank in 2023, USDC momentarily lost its peg on secondary markets. However, USDC swiftly rebounded as it was revealed that the FDIC would guarantee the bank’s deposits. 

Stablecoins have recovered despite the challenges and the ongoing absence of federal legislation that would regulate the emerging industry. However, it needs to be determined how much of the volume is generated by actual users instead of bots and large-scale dealers. While certain TradFi firms, like Stripe, have started incorporating USDC into their services, other companies, including PayPal and VanEck, have introduced or supported their stablecoins.