Last year Stripe spent $1.1 billion acquiring Bridge, the company that provides cross border API infrastructure for stablecoin payments. On Friday a member of Stripe’s crypto product team, Jennifer Lee, announced on X that the company is starting to test its Bridge-based product and invited companies outside the US, UK and EU who want to access dollars. She didn’t mention which stablecoins solutions would be offered initially.
Bridge’s APIs support several corporate use cases including cross border transfers, enabling large corporates such as SpaceX’s Starlink to move money around the world, and dollar payouts to staff or others. An important one is enabling clients in countries with volatile currencies to save using dollar stablecoins.
Stepping back, Stripe’s appeal for participant companies outside the US, UK and EU is notable. While it’s easy to think that Stripe has a presence worldwide because it sends payments globally, it only offers services to companies in 51 jurisdictions, of which 31 are in Europe, plus the five mainly English-speaking regions of the US, UK, Canada, Australia and New Zealand.
So stablecoins could help Stripe to expand its reach quickly.
In 2020 it acquired PayStack which forms part of its ‘extended network’ in Africa. But it only serves companies in the Ivory Coast, Ghana, Kenya, Nigeria and South Africa. Three of these countries are in the top five crypto P2P volume rankings (see below). Stripe supports companies in seven Asian countries (two are recent, including India), two in Latin America (Mexico and Brazil) and one in the Middle East (UAE).
Anecdotal evidence has shown that stablecoins appeal most to people in countries with volatile currencies and/or very high cross border payments costs. Quite a few of these countries shown in the table below are not currently served by Stripe.
Stablecoins to service high cost corridors
We believe a high proportion of the crypto P2P payments (ie. payments not via exchanges) in the above table are likely to use stablecoins. World Bank statistics on the cost of African remittances are usually based on payments between African countries. For example, a transfer from Kenya to Tanzania can cost as little as under 2% if sent via M-Pesa, but other options charge more than 30%, with most around the 10% mark.
Costs of a payment between Ghana and Nigeria vary from 7% to 24%. Surprisingly, payment via the internet is the most expensive, which could relate to fraud risks. Stablecoins could help address that.
Hence, Stripe’s Bridge integration represents a strategic addition in emerging markets, where stablecoins offer both expanded payment options and access to previously underserved territories with volatile currencies.
