Stripe hopes to facilitate web3 purchases with crypto payments onramp

The news: Stripe introduced a fiat-to-crypto payment solution that makes it easier for consumers to purchase cryptocurrencies without having to go through a crypto exchange, per a press release.

Web3 sites—like nonfungible token (NFT) platforms and decentralized exchanges—can embed Stripe’s fiat-to-crypto widget into their tech stack to facilitate purchases. The service will be available to US customers before expanding over time.

Key context: Consumers often need cryptos to purchase NFTs or interact with other web3 services. That means signing up with a crypto exchange—which requires jumping through know-your-customer (KYC) hoops—purchasing cryptos, and then transferring them to a noncustodial wallet.

Stripe’s fiat-to-crypto widget avoids the exchange-to-wallet process. Stripe will handle KYC and other compliance procedures, fraud protection, and payments.

Why it’s worth watching: Stripe appears unperturbed by the widespread turmoil in the crypto sector.

• Signs of systemic instability emerged earlier this year after stablecoin TerraUSD’s implosion roiled markets and contributed to bankruptcy filings at crypto hedge fund Three Arrows Capital and crypto lenders Voyager Digital and Celsius Network.
• FTX’s collapse is likely the most high-profile case to date. The crypto exchange previously led by Sam Bankman-Fried filed for Chapter 11 bankruptcy last month and is facing a class-action lawsuit. The Securities and Exchange Commission and the Department of Justice are also investigating it. Stripe had a previous partnership with FTX.
• Not long after FTX’s fall, BlockFi also filed for bankruptcy. BlockFi had strong ties to FTX—the crypto exchange received a $400 million credit facility from FTX earlier this year. Following its bankruptcy, BlockFi’s Visa rewards credit card became unavailable to new applicants and unusable to existing cardholders.

What this means: Stripe sees valuable use cases for crypto payments within the context of web3, which is expected to reach $81.5 billion in global market value by 2030, per Emergen Research.

The fact that Stripe is willing to invest in a crypto offering despite recent cost-cutting efforts showcases its belief that there’s enough demand to generate strong revenues. It laid off 14% of its staff last month, citing tough economic conditions. It also said it would reduce investments to match the current economic environment.

This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.

• Are you a client? Click here to subscribe.
• Want to learn more about how you can benefit from our expert analysis? Click here.