Illustrative image of two memorial bitcoins with a green background.
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Stripe will allow companies to pay their users via cryptocurrencies, starting with Twitter, as the latest sign of how big financial companies are heating up digital assets.
The $ 95 billion online payment company said Friday that it will begin offering traders the option to make crypto payouts through stablecoin USDC, which is issued by the crypto company Circle. Stablecoins are tokens pegged to fiat currencies to maintain a stable price. In the case of the USDC, the cryptocurrency, as the name suggests, is backed by the US dollar.
Twitter will be the first company to integrate the new payment method. As of Friday, the social media platform – which has been the subject of much talk lately about a potential acquisition of Tesla CEO Elon Musk – will let a certain number of creators receive their earnings from their paid Ticketed Spaces and Super Follows features in USDC.
It’s Stripe’s first significant push for crypto since dropping support for bitcoin four years ago. The San Francisco-based start-up stopped accepting payments via bitcoin in January 2018, citing the digital coin’s notoriety for volatile price fluctuations and inefficiency in making daily transactions.
But the company has since warmed up to crypto amid hype over “Web3,” a technology movement that calls for the creation of a decentralized version of the Internet based on blockchain technology. Last year, Stripe formed a team dedicated to exploring crypto and Web3. In November, Stripe co-founder John Collison suggested that the company 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 rails’ as at least as compelling,” Karan Sharma, product manager at Stripe’s cryptocurrency unit, said in a blog post Friday. “As a result, we’ve explored ways to use cryptocurrency-based platforms to unlock wider access.”
The company’s crypto payout 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 come under fire due to sluggish transaction times and high fees.
“We plan to add support for additional rails and payout currencies over time,” Sharma said.
Stripe is not the only company to open its platform for digital currencies – in fact, the company is undoubtedly late for the party. Visa, Mastercard and PayPal and other major payment processors have all announced their own features in the room. That was back when digital currency prices were still rising.
Recently, several major cryptocurrencies have fallen sharply from record highs, with bitcoin, the world’s largest, falling more than 40% from a 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.