稳定币初创公司分道扬镳：TradFi 还是 DeFi？

Original author: YB

原文翻译：路飞，先见之明新闻

In May 2021, Byrne Hobart wrote a brilliant article titled “ Stripe and the Solid Economy ” in which he expounded on a point of view:

Cars, Excel spreadsheets, vacuum tube computers, poorly implemented recursive programs, and attempts to win at real-time strategy games all fail for the same reason: they have a lot of moving parts, and the more moving parts, the more likely they are to break.

He noted that Stripe is a valuable company because it seamlessly combines multiple business functions required for online payments.

The problem, however, is that Stripe is limited to e-commerce, which is constrained by the institutions of the global financial system.

It turns out that there isn’t actually “one” global payment system. Some countries have multiple payment systems, some of which overlap in certain ways, and participating in these systems requires government approval, bank permissions, technology development, and ongoing compliance and maintenance costs.

In other words, global payments are difficult because the network effects between currencies are not strong. People in the 加密货币currency field know this: this is the main value prop of DeFi.

So why am I bringing this up? Because right now Twitter is abuzz with joy over Stripes acquisition of Bridge for $1.1 billion.

It’s right to celebrate… this is a win for crypto! The Collison brothers’ bet on crypto is sending a signal to other players in the fintech industry.

This is the largest acquisition in the history of cryptocurrency. It is followed by Coinbase (acquisition of Bison Trails for $475 million in 2021) and Binance (acquisition of Coinmarketcap for $400 million in 2020).

What caught me off guard about this news wasn’t the acquisition itself, but that I had completely failed to realize that the stablecoin ecosystem is much larger than the usual suspects like Circle (USDC) and Bitfinex (USDT).

Mostly, Bridge hasn’t even been on the radar. For the past 2.5 years, they’ve been quietly exploring the stablecoin space, trying to figure out where they can make the best difference.

Bridge co-founders Zach and Sean ultimately found Stablecoin Orchestration as the answer, which is just a fancy way of saying their suite of APIs makes it easy to convert between stablecoins and foreign currencies, and vice versa.

So why was this acquisition a natural fit for Stripe? Because Bridge enables them to get rid of too many moving parts and consolidate their payment processing.

But what does this mean? And what impact does this acquisition have on other traditional finance and stablecoin startups?

Traditional financial companies enter the market

When using Stripe, most people don’t realize that the product is handling the processes between various stakeholders: banks, payment networks, and SWIFT for global money transfers, among others.

But as Byrne mentioned, Stripe just makes online payments feasible.

Stripe belongs to an interesting class of value-creating companies, which provide services that make some process work the way you imagine it to work, even if you’ve never actually tried it.

However, these middlemen not only add transfer and settlement delays, making Stripes process inefficient, but also take a portion of the fees from the value chain.

This problem is not unique to Stripe, PayPal also faces the same problem, which is probably the main reason why they launched their own stablecoin PYUSD last August.

By integrating stablecoins, these fintech companies are one step closer to capturing the entire online payment value chain.

As I mentioned above, payment companies like PayPal and Stripe work with existing banks to hold user funds. But by using stablecoins, they are able to have greater autonomy over the value of transactions on their networks.

This quote from Delphi Digital’s report on crypto product moats explains financial incentives:

…by letting users hold pyUSD through PayPal’s payment frontend (e.g. Venmo), PayPal effectively becomes a bank. PayPal can then take user funds and deposit them into its treasury and earn a yield. This not only allows PayPal to squeeze payment fees to zero, but even has the ability to pay users kickbacks or some of the earnings on idle pyUSD balances. This is a crushing advantage over other Web2 payment app competitors.

They make themselves banks, which is the main motivation of fintech giants. From a business perspective, this point may be more important than faster transaction and settlement speeds.

Now, the interesting thing to point out is that PayPal and Stripe took different approaches.

PayPal’s decision to issue their own stablecoin means they are focused on money management. Stripe’s bet on the conversion layer shows they are focused on stablecoin infrastructure. They chose their respective paths because it fits their current technology stack.

At a high level, Stripe is a payment API company, and Bridge fits right into that concept. Stripe only needs to integrate Bridge’s stablecoin API into their own developer documentation.

PayPal thrives on a large retail user base through front-end services like Venmo. Therefore, their crypto team naturally focuses on optimizing how to manage user balances and utilize this capital. Issuing its own stablecoin, PYUSD, enables PayPal to handle funds more efficiently.

In my opinion, it is inevitable for both companies to verticalize the entire stablecoin stack. Providing internal tools for stablecoin issuance, fund management, debit cards, crypto wallets, etc. is critical. This seems like a no-brainer, as having the full stack in-house will enable the companies to provide the best user experience and capture a larger share of the payments value chain.

In other words, don’t be surprised to see Stripe launch its own smart wallet and crypto debit card.

Additionally, it is worth noting that token issuance is a cash cow for stablecoins. For example, Tether generated more profit than BlackRock in the fourth quarter of 2022. Therefore, as Stripe explores the maze of stablecoin ideas with its users, they will eventually launch a stablecoin to help their merchants quickly onboard and provide incentives for using their ecosystems native stablecoin.

Both Stripe and PayPal have a massive global presence and will seek to plug into stablecoin infrastructure within existing networks. As Viktor mentioned above, over the next 5 years, those companies that “cannibalize the existing model” before other market participants will benefit greatly.

Now, you might be thinking: if Stripe and PayPal go all-in on a stablecoin strategy, wouldn’t that be a huge threat to payment networks like Visa and Mastercard?

Indeed. That’s why Visa and Mastercard have already started to develop their own playbooks so as not to miss out on the stablecoin revolution. For example, Visa became the first payment network to accept USDC in 2020, while Mastercard launched its own crypto credit card service.

But I suspect that Stripe’s acquisition of Bridge has accelerated the stablecoin strategies of the crypto teams at these large traditional finance/fintech companies.

As for banks? To be honest, I’m not sure what their response strategy will be. It’s clear that stablecoins undermine their position as international payment facilitators and safekeeping for user deposits. But their advantage is that they comply with government regulation, and they might be inclined to the rise of CBDCs?

For example, the BRICS countries have just announced that they are currently launching their own digital currency to reduce their reliance on the US dollar. It is obvious that banks will jump at the opportunity to develop their own CBDC strategies in order to compete for this new market share.

Whatever the answers are to these various traditional finance stakeholders, the overall theme remains consistent: stablecoins have entered the financial arena.

The question now is which large institutions will embrace the new entrants to the financial system with open arms and quickly become friends with stablecoins.

In a way, many of the different players in traditional finance are starting to look very similar as they all look to use stablecoins to provide full-stack financial services (payments, banking, card services, etc.).

So far we have explained the impact of stablecoins on all fintech players, but what will become of the upstart crypto-native stablecoins?

If you have to choose only one, TradFi or DeFi?

Based on my previous research, founders in the stablecoin vertical need to choose who they cater to:

• Traditional finance/Web3 technology companies

• On-chain cryptocurrency adopters

The first is clearly the goal of Stripe’s acquisition of Bridge; the second hints at the long tail of the upcoming DeFi-native stablecoin infrastructure. But what exactly is the difference between the two?

The size of the stablecoin ecosystem goes far beyond replacing fintech payment services. As I mentioned in my article on stablecoin adoption, it is a two-pronged approach. On one hand, working to improve existing financial rails, and on the other hand using stablecoins to enhance crypto products, such as Polymarket, Bountycaster, Uniswap, Aave, etc.

One category of startups hopes to become plug-ins for traditional financial players as they seek to find stronger partners, including Paxos, Ondo Finance, Brale, Agora, Coinflow and Sphere.

Another category of startups prefer a fully decentralized stablecoin infrastructure stack, including Prerna, Gnosis Pay, Based App, and Picnic. These companies hope to become direct competitors to products such as Stripe and PayPal. They cater to audiences who prefer cryptocurrencies and help improve the on-chain experience through applications that support stablecoins.

That being said, I think founders should think about a barbell strategy for stablecoins. Are we catering to traditional financial firms that will inevitably want to enter the stablecoin space? Or are we building stablecoin infrastructure for DeFi applications and trying new experiments that don’t make sense for Stripe and PayPal?

In my view, companies that try to double-check will either be beaten by traditional finance players with distribution moats or by DeFi players who optimize their products for unique on-chain functionality.

Today’s post is to share some of my initial thoughts after hearing the news of the Bridge acquisition, but I haven’t found meaningful answers to the following questions:

• Where are the moats in the stablecoin stack?

• How will other Web2 Fintech players participate?

• If another acquisition were to occur, who would it be?

In the coming months, developments in the stablecoin space will become increasingly interesting.

This article is sourced from the internet: Stablecoin startups part ways: TradFi or DeFi?