Key Takeaways
- Mastercard Zerohash acquisition talks value the crypto infrastructure startup between $1.5 and $2 billion.
- This follows Mastercard’s unsuccessful bid for stablecoin startup BVNK, which was secured by Coinbase.
- Zerohash provides trading, tokenization, and stablecoin infrastructure for financial institutions.
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Payment Giant Doubles Down on Crypto
Payment services giant Mastercard is in advanced negotiations for its Mastercard Zerohash acquisition, potentially valued at as high as $2 billion, according to sources familiar with the matter. The deal, if completed, would be the second major stablecoin infrastructure play Mastercard has made this month, following its recently unsuccessful bid with the startup BVNK, which subsequently entered exclusive discussions with Coinbase.
The possible Mastercard Zerohash acquisition would be among the largest investments in cryptocurrency by the payment processor to date, demonstrating its belief in the merits of blockchain technology despite potential friction with its business.
Read also: Goodbye CEXs: Mastercard’s 3.5B Cards Go Onchain with Chainlink’s Crypto Bridge
Strategic Expansion Beyond Payments
The Mastercard Zerohash acquisition is targeting a company that offers wider capabilities than pure stablecoin providers. In contrast to competitors like BVNK and Bridge, which focus primarily on stablecoin payments, Zerohash allows financial institutions to launch crypto trading platforms and tokenize traditional assets through Application Programming Interfaces (APIs).
The Chicago-based startup recently raised $104 million in September at a $1 billion valuation, with backing from large financial players such as Morgan Stanley, Interactive Brokers, and Apollo, which suggests a level of institutional confidence in its infrastructure approach.
Read also: MoneyGram Stablecoin App Launches to Revolutionize Remittances
Racing Against Crypto Competitors
The timing of the Mastercard Zerohash acquisition discussions highlights the competition between traditional financial firms and crypto-natives to control stablecoin infrastructure.
To this point, with Stripe’s $1.1 billion Bridge acquisition and Coinbase’s potential BVNK deal, Mastercard cannot afford to fall behind in the race to modernize payment rails. Despite concerns that stablecoins could disrupt Mastercard’s interchange fee model, the company appears to be embarking on a strategy of accepting the technology instead of rejecting it, as it has already acquired a blockchain analytics firm, CipherTrace, in 2021.
FAQs
Why is the Mastercard Zerohash acquisition an interesting crypto use case?
Zerohash provides crypto infrastructure that allows banks and fintech companies to offer blockchain-based services like stablecoin payments, tokenization of traditional assets, and crypto trading platforms through APIs.
Why is Mastercard interested in stablecoin companies?
Despite potential competition with its core business, Mastercard recognizes that stablecoins offer faster, cheaper settlement than traditional payment services and wants to put its business at the forefront of payment innovation rather than being disrupted by it.
How does this compare to other recent stablecoin acquisitions?
The potential $2 billion valuation would exceed Stripe’s $1.1 billion acquisition of Bridge last year, at the time that matches Coinbase’s reported $2 billion offer for BVNK, indicating growing competition for established crypto infrastructure players.
For more stablecoin infrastructure stories, read: Stripe and Paradigm Launch Tempo, A New Stablecoin Payments Blockchain
