Bridge Secures $58M to Develop a Stablecoin Network for Payments

Bridge, a stablecoin payment network co-founded by former Square and Coinbase executives Zach Abrams and Sean Yu, has successfully raised $58 million from industry investors, including Sequoia, Ribbit, and Index Ventures. The company’s goal is to establish a global network that could challenge traditional payment systems 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

According to a Fortune report, Sequoia and Ribbit contributed $40 million to Bridge, a previously undisclosed portion of the total $58 million investment. Among Bridge’s prominent clients are SpaceX and Coinbase.

Improving Payments with Stablecoins

Bridge’s platform integrates stablecoin transactions into existing financial frameworks through two primary services: issuance and orchestration. The Orchestration service provides APIs that facilitate smooth currency conversions between USD, EUR, USDC, PYUSD, and USDT, while ensuring low costs, rapid settlements, and seamless cross-border transactions.

Abrams explained that Bridge is designed as a set of low-level APIs, allowing companies to leverage stablecoin infrastructure without needing to focus on the underlying technology. Additionally, businesses can develop custom stablecoins through the Issuance API, enabling them to offer digital dollar-based services tailored to specific needs.

Bridge is focused on enhancing the efficiency and cost-effectiveness of payment systems by streamlining stablecoin integration into business operations. To achieve this, the company is expanding its customer base, improving its stablecoin services, and forming strategic partnerships, such as a collaboration with Bitso to facilitate cross-border payments in Latin America.

Stablecoin Growth Amid Scrutiny

In the past two years, stablecoins have seen significant growth. Tether, the leading stablecoin, is now valued at over $118 billion, while USDC is valued at $34 billion. However, the stability of some stablecoins has come under scrutiny following several notable incidents.

In 2022, TerraUSD, an algorithmic stablecoin, collapsed after failing to maintain its $1 peg, sparking a broader crypto crisis and leading to congressional hearings and regulatory scrutiny. In 2023, USDC temporarily lost its peg when it was revealed that its issuer, Circle, held reserves in the troubled Silicon Valley Bank. USDC quickly recovered after the FDIC guaranteed the bank’s deposits.

Despite these challenges and the ongoing lack of federal regulation, stablecoins have rebounded. However, it remains unclear how much trading volume is driven by real users versus bots and large traders. While some traditional financial firms like Stripe have integrated USDC, others like PayPal and VanEck have launched or supported their own stablecoins.