Stripe Acquires Privy
Building the On-Chain Banking Stack
Stripe has made its second crypto-native acquisition: Privy, the embedded wallet infrastructure company. The deal terms were undisclosed, but chatter on X hints at a 10-figure valuation. Like their previous acquisition of Bridge, Privy will continue to operate independently.
In Stripe’s 2024 Annual Letter, they made a bold declaration: “Stripe’s platform will be the best way to build with stablecoins.” This acquisition shows they’re executing against that roadmap, and fast.
Why Privy?
Privy provides embedded, non-custodial wallet infrastructure via API. Instead of relying on standalone wallets like Metamask or Phantom, Privy lets developers embed wallets directly into their apps, whether it's a marketplace, game, or fintech platform. Their customers include loyalty app Blackbird, payroll firm Toku, and NFT marketplace OpenSea.
Privy isn’t just a set of APIs, it’s a battle-tested product with a Stripe-like developer experience, a customer-obsessed team, and strong credibility in the crypto builder ecosystem. Industry voices consistently highlight their execution quality.
While some might argue that Stripe could’ve built this in-house, that misses the point. Building a v1 is easy. Polishing the details—handling edge cases, evolving with customer needs, supporting production workloads—isn’t. Stripe chose to buy speed, credibility, and product-market fit.
What Stripe Gets
This is more than a tech acquisition. Stripe is acquiring:
A top-tier team with crypto-native product DNA
A developer-first embedded wallet platform
A broad crypto native customer base
Momentum today, not in 18 months
As I’ve said before, stablecoins reduce the cost of launching financial products. In this land grab, speed matters. Stripe is racing to arm the builders of Fintech 3.0, and Privy helps them do it faster.
What Privy Gains
For Privy, the upside is enormous. Stripe offers:
Distribution to a massive base of fintech and enterprise developers
A global reputation for reliability and compliance
The capital and support to continue executing independently
It’s a major boost in both reach and resourcing.
BaaS 2.0: On-Chain Banking via API
This deal fills a critical gap in Stripe’s emerging “Bank in a Box” stack: one built not on traditional bank custody, but on non-custodial crypto rails.
Here’s the shift: In traditional fintech, holding customer balances (fiat or crypto) requires sponsor banks, custodians or you have to take custody yourself. With non-custodial wallets, platforms can avoid legally holding customer funds, and sidestep complex licensing and banking integrations.
This effectively enables a powerful model of Regulatory Arbitrage as a Service:
Bridge provides compliant fiat on/off ramps for customers from 100+ countries (via Lead Bank)
Privy enables embedded self-custody wallets
All through a Stripe-grade developer experience
This is “Banking as a Service” reimagined, built for global scale, with no dependency on holding funds or bank partnerships and therefore no Synapse-style bankruptcy risk. Just programmable, permissionless financial infrastructure.
Use Cases Unlocked
This unlocks a broad set of use cases, especially in emerging markets and global B2B fintech:
Merchant acquirers can enable stablecoin accounts and settlement with limited licensing burden
Marketplaces can create seller wallets instantly
Gig platforms can hold balances for freelancers without becoming financial institutions
Global businesses can convert, hold, and deploy USD locally to hedge FX risk
As M0 put it: “Everything is a Bank.” Stripe is giving developers the tools to build those banks via API.
What’s Next for Stripe’s On-Chain Stack
Stripe is assembling the infrastructure for Fintech 3.0. Here’s where they stand:
Core capabilities (Fintech 2.0):
🟢 Payment Acceptance
🟢 Financial Accounts (Treasury, Card Issuance)
🟢 Revenue and Billing
🟢 Identity, Risk, Fraud
🟢 Embedded Finance
🟢 Multi-currency support and licensing
On-chain capabilities (Fintech 3.0):
🟢 Custodial wallets – via Bridge
🟢 Non-custodial wallets – via Privy
🟢 Stablecoin acceptance – via Bridge and Paxos integration
🟢 Payouts – via Bridge and ZeroHash
🟢 USD/EUR/GBP rails and on/off ramps – via Bridge
🟢 Stablecoin issuance-as-a-service – via Bridge
🟡 Foreign currency rails, FX and on/off ramps – via Bridge + partners
🟡 Digital asset licenses – via Bridge, with more likely forthcoming
🔴 On-chain lending and credit (DeFi)
🔴 Crypto trading
Expect Stripe to continue building and acquiring in three directions:
Global licensing: Stripe is likely to pursue digital asset and payments licenses to expand its reach, especially in emerging markets.
Local currency rails: Bridge recently launched MXN support. Expanding non-USD on/off ramps will strengthen Stripe’s position as a global payments platform.
New financial services: Credit, lending, and possibly crypto trading could follow—allowing Stripe to offer modern business bank accounts globally, much like Revolut Business, but via API.
This roadmap pushes Stripe closer to becoming the default programmable financial layer for the internet.
A Not-So-Wild Prediction: Consumer Applications
There’s one more piece of the puzzle: consumer-facing apps.
Companies like Block have long tried to connect their consumer and merchant ecosystems (Cash App ↔ Square). PayPal aims for the same with Venmo ↔ PayPal Checkout. The theory is simple: keep payments within the same network and bypass card rails.
But the results have been underwhelming. Most of Cash App’s revenue comes from trading, not in network payments. Consumer-merchant overlap is thin, making the ecosystem effect hard to realize.
Stablecoins change the equation.
You no longer need a closed system to bypass Visa and Mastercard. Stablecoins operate on open, programmable networks. So the strategic value of a consumer app is no longer just payments. It’s to offer an end-to-end digital finance experience: hold, send, spend, trade, like Revolut.
A consumer app could expand Stripe’s TAM beyond B2B and embedded finance and create a direct distribution channel for on-chain financial services developed within the B2B and B2B2C segments.
And there’s a powerful network effect at play.
Stripe already acts as a reputation network for payment credentials. 93% of card payments processed involve a previously seen card. That insight feeds into fraud detection and risk scoring.
Now imagine that extended to wallets.
As millions of embedded wallets come online, Stripe can track transaction history for consumers directly, tie it with verified identity data and augment their risk scoring systems. Risk and compliance remain a large portion of the cost of payments, and Stripe-connected parties would benefit from lower friction, higher-trust payment flows.
That’s a powerful moat.
For now, Stripe may rely on the B2B2C apps built on its stack to fill this gap. But don’t rule out a consumer app acquisition. The infrastructure is falling into place, and owning distribution could become strategically necessary.
Conclusion
With Bridge, Privy, and its existing infrastructure, Stripe is assembling a borderless financial OS: one that spans wallets, payments, identity, and compliance.
Whether through APIs or, eventually, a consumer-facing app, Stripe is making it easier for anyone—developers, platforms, businesses, and perhaps one day individuals—to participate in the on chain economy.
The future is on-chain, and Stripe is building the tools to unlock it.