Stripe launches crypto payments feature, with Twitter as first customer

Stripe will allow businesses to pay their users via cryptocurrencies, starting with Twitter in the latest sign of big financial firms warming to digital assets.

The $95 billion online payments company announced on Friday that it will offer merchants the ability to withdraw in crypto via stablecoin USDC, which is issued by crypto firm Circle. Stablecoins are tokens tied to fiat currencies to maintain a stable price. In the case of USDC, as the name suggests, the cryptocurrency is backed by the US dollar.

Twitter will be the first company to integrate the new payment method. Beginning Friday, the social media platform — which has been the subject of much talk lately about a potential takeover by Tesla CEO Elon Musk — will allow a select number of developers to share their revenue from its paid Ticketed Spaces and Super Follows features in to obtain USDC.

It is Stripe’s first significant foray into crypto since it ended support for Bitcoin four years ago. The San Francisco-based startup stopped accepting payments via Bitcoin in January 2018, citing the digital coin’s notoriety for volatile price fluctuations and a lack of efficiency in day-to-day transactions.

But the firm has since warmed to crypto amid the hype surrounding “Web3,” a tech movement calling for the creation of a decentralized version of the internet based on blockchain technology. Stripe last year formed a team dedicated to researching crypto and Web3. In November, Stripe co-founder John Collison hinted that the firm could soon offer crypto support again.

“While the ‘store of value’ aspects of cryptocurrencies typically get the most attention, we see the prospect of ‘open global financial tracks’ as at least as compelling,” Karan Sharma, product manager at Stripe’s crypto unit, said in a blog post Friday. “As a result, we’ve been looking at ways to leverage cryptocurrency-based platforms to enable broader access.”

The company’s crypto payout function runs on the Polygon network, a so-called “Layer 2” solution that sits on top of the Ethereum network to process transactions faster and at lower costs. Bitcoin, Ether and other cryptocurrencies have been criticized for sluggish transaction times and high fees.

“We plan to add support for additional rails and payout currencies over time,” Sharma said.

Stripe isn’t the only company opening up its platform to digital currencies — in fact, the company may be late to the party. Visa, Mastercard, and PayPal, among other major payment processors, have all announced their own moves in this area. That was back when digital currency prices were still rising.

More 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 nearly $69,000. Bitcoin was trading at around $39,724 on Friday, down around 6% over the past 24 hours, according to data from Coin Metrics.