Another crypto firm is in Mastercard's crosshairs. The payments goliath is said to be in late-stage talks to acquire the crypto and stablecoin infrastructure startup Zerohash for between $1.5 and $2 billion, according to five sources familiar with the deal, who asked for Confidentiality for private business talks. Should this transaction finalize, it would signify one of Mastercard's most substantial investments to date in stablecoins, which are digital currencies tied to assets such as the U.S. Dollar. Currency.
TL;DR
- * Mastercard is reportedly in late-stage talks to acquire crypto firm Zerohash for $1.5 to $2 billion.
- * Zerohash develops stablecoin and blockchain infrastructure, facilitating payments and crypto trading.
- * This acquisition would be a substantial investment by Mastercard in stablecoins.
Established in 2017, Chicago's Zerohash develops stablecoin and blockchain infrastructure, facilitating payments and cryptocurrency trading. Mastercard's potential acquisition comes after prior talks with the stablecoin startup BVNK. The payments network and Coinbase were in late-stage talks to purchase the startup for approximately $2 billion, as stated by six individuals knowledgeable about the discussions. Coinbase seems to have emerged victorious in the bidding competition and has secured exclusive negotiations with the company, preventing BVNK from considering proposals from other interested parties, as reported by three individuals knowledgeable about the situation.
Representatives from Mastercard, Zerohash, and Coinbase chose not to provide a statement. BVNK's representative was unavailable for immediate comment.
The stablecoin craze
With the cryptocurrency market experiencing a significant upswing lately, stablecoin providers have become a particularly sought-after segment within the industry. After the payments firm Stripe acquired the stablecoin startup Bridge for $1.1 billion, a slew of other venture rounds and acquisition talks followed.
The acquisitions of Bridge by Stripe and ongoing discussions between Coinbase and BVNK signify substantial investments in stablecoins, and the cryptocurrency sector overall, as the future of financial transactions. Supporters contend that stablecoins present benefits compared to conventional systems such as wires and SWIFT, as blockchain technology enables quicker transaction settlements and reduced processing fees. However, the necessary infrastructure for this future remains underdeveloped, prompting major corporations such as Coinbase, Mastercard, and Stripe to seek out startups that can assist in developing their novel product lines.
Bridge and BVNK concentrate on stablecoins, enabling businesses to utilize cryptocurrencies like USDC and Tether for applications such as international payroll and treasury operations. Zerohash enables expanded product lines, assisting businesses in launching their own cryptocurrency trading platforms, providing APIs for tokenization, and integrating traditional financial assets with blockchain technology. Backed by a slew of investors, including Interactive Brokers, Apollo, Point72 Ventures, and Nyca, Zerohash raised a $104 million funding round in September at a $1 billion valuation.
While stablecoins possess the potential to disrupt Mastercard's core revenue stream derived from transaction interchange fees, the established payments company has maintained a consistent presence in the cryptocurrency space, notably through acquiring its CipherTrace, a blockchain analytics firm, in 2021. Subsequently, it shut down several of CipherTrace's primary offerings. Mastercard has recently increased its involvement with stablecoins, notably through its participation in joining a consortium that includes Robinhood and Kraken, dedicated to this technology.