Mastercard to expand crypto reach with $2B Zerohash acquisition

Mastercard is reportedly in serious talks about purchasing the crypto and stablecoin startup Zerohash, which is valued at between $1.5 billion and $2 billion. This move shows that the payment company is considering the acquisition of another crypto firm.

Five sources close to the talks stated that, although there is a possibility the deal might not materialize, it would be one of Mastercard’s largest investments in stablecoins if it does. ZeroHash previously raised over $100 million in funding, valuing the company at more than $1 billion.

Industry analysts say the move aligns with Mastercard’s plan to enhance its cryptocurrency capabilities and rival other major payment companies, such as Visa and PayPal, which are also backing blockchain-based payment infrastructure.

The acquisition could also have implications for emerging markets, where integrated crypto and stablecoin rails may enhance cross-border payments, reduce costs, and offer new options for fintechs and consumers.

Mastercard shows growing interest in the acquisition of stablecoin startups

Founded in 2017, Zerohash is a leading provider of crypto and stablecoin infrastructure, enabling banks and fintech firms to offer blockchain-based products in three key areas: stablecoins, tokenization, and cryptocurrency trading.

Regarding Mastercard’s move to purchase Zerohash, six sources with knowledge of the matter mentioned that the announcement of this potential acquisition came after the payment company’s earlier talks with another stablecoin startup, BVNK. Mastercard and Coinbase were close to acquiring BVNK for about $2 billion during this negotiation period. 

However, sources pointed out that Coinbase seems to have finalized the deal and is currently in an exclusive partnership with BVNK. This meant that they cannot consider offers from other potential buyers, according to the sources.

Meanwhile, it is worth noting that as the crypto industry has grown in value over the past year, firms, particularly those involved with stablecoins, have gained increased popularity. To support this claim, analysts have discovered that following Stripe’s acquisition of the stablecoin startup Bridge for approximately $1.1 billion, numerous other investment agreements and acquisition discussions have ensued. 

These recent examples of the acquisition of stablecoin startups demonstrate that investors strongly believe that stablecoins and the broader cryptocurrency market will be the future of payments.

Additionally, supporters weighed in on the topic of discussion, claiming that stablecoins have benefits compared to traditional methods such as SWIFT, transfers, and wire transfers. Based on their argument, blockchain technology can facilitate transactions more efficiently and at a lower cost.

Still, sources noted that the essential infrastructure required to support this vision is being developed, prompting major firms like Coinbase, Mastercard, and Stripe to seek out startups to enhance their new products. 

Analysts worry that stablecoins might threaten Mastercard’s business model

Bridge and BVNK are focused on stablecoins, enabling businesses to leverage cryptocurrencies like USDC and Tether for purposes such as global payroll and treasury management.

On the other hand, Zerohash provides a broader scope of services. This includes helping firms establish their own crypto trading platforms and offering APIs for tokenization, which entails placing traditional financial assets into blockchain formats.

In September, Zerohash raised approximately $104 million in funding, backed by a strong support system from several investors, including Apollo, Point72 Ventures, Interactive Brokers, and Nyca. At this time, the stablecoin startup secured a valuation of $1 billion. 

While analysts have raised concerns that stablecoins might threaten Mastercard’s business model, which depends on earning a small payment for every transaction, the company noted that it has been participating in the cryptocurrency ecosystem for some time.

Experts suggest the acquisition could have significant implications for emerging markets, including Africa. With Mastercard potentially embedding ZeroHash’s infrastructure into its global network, banks and fintechs in these regions could gain faster, lower-cost access to stablecoin and crypto payment rails. This could improve cross-border remittances, reduce transaction fees, and enable new business models for digital payments.

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