Stripe banks on crypto with new features for blockchain businesses

10 Mar Stripe banks on crypto with new features for blockchain businesses

Payments giant Stripe now supports crypto businesses, including cryptocurrency exchanges, digital wallets, and NFT marketplaces.

The company’s cofounder John Collison shared the news on Twitter Thursday with a link to a page explaining Stripe’s use cases in the Web3 universe. For exchanges, it lets platforms process payments in global fiat currencies smoothly, as well as pay out fiat in more than 45 countries. It also provides a sleek API for digital wallets, allowing users to track and manage their Bitcoin, Ether, and Bored Apes on handy widgets. And NFT marketplaces can leverage Stripe’s Identity feature to quickly verify the authenticity of identity documents from 33 countries, allowing them to vet buyers and sellers.

Such features could combat one of the biggest problems in the cryptosphere today: the risk of fraud. As the industry has become more mainstream, scammers have multiplied rapidly in hopes of taking advantage of confusion and naivety in the nascent space—and unfortunately, many have succeeded. According to data from blockchain analytics firm Chainalysis, crypto-criminals bagged a record $14 billion in 2021, as losses from scams and theft grew 79% from the year before.

For businesses, Stripe’s crypto offering advertises “fraud prevention and authorization optimization built in.”

Its current clients include Blockchain.com, Nifty Gateway, Just Mining, and the $32 billion-valued FTX, whose president, Brett Harrison, testified that Stripe’s automated identity verification “greatly increased speed of KYC [know your customer] processing, higher rates of automated approvals, and a smoother UX for our customers.”

However, Stripe has lagged behind its major competitors Block (formerly Square) and PayPal in venturing into crypto. Block—led by noted blockchain enthusiast Jack Dorsey, who renamed his company after the Web3 technology—has offered crypto capabilities for years. PayPal and its subsidiary Venmo have both supported buying, selling, and holding crypto since early 2021, and PayPal is also reportedly exploring a launch of its own stablecoin.

Stripe topped Fast Company‘s 2022 list of Most Innovative Companies, largely owing to its Stripe Climate initiative, which lets businesses contribute a percentage of their digital sales to carbon-removal efforts; tens of thousands of customers have since signed up. Cryptocurrencies, however, have been heavily criticized as many of them use consensus mechanisms that release enormous clouds of greenhouse gases. Stripe’s crypto-for-businesses page does not mention this but includes a link to join its climate pledge.

Source: Fast Company