Coinbase Calls Off BVNK Acquisition

A report has claimed Coinbase has called off its $2 billion acquisition of stablecoin startup BVNK. The development was later confirmed by a spokesperson for the exchange. 

Coinbase and Mastercard had been in advanced negotiations to acquire the UK-based fintech firm. 

Coinbase-BVNK Deal Off 

Coinbase and BVNK have called off what could have been one of the largest deals for a stablecoin startup. A Coinbase spokesperson confirmed the developments, although it isn’t clear why the companies have scuppered a deal that had reached the due diligence process. Coinbase and BVNK entered into exclusivity in October, which meant the stablecoin startup could not entertain offers from other bidders. A Coinbase spokesperson stated, 

“We’re continuously seeking opportunities to expand on our mission and product offerings. After discussing a potential acquisition of BVNK, both parties mutually agreed not to move forward.”

A Strong Presence 

The deal between Coinbase and BVNK was reportedly around $2 billion, a sizable premium above another recent acquisition of a major stablecoin infrastructure firm. Stripe recently announced the acquisition of stablecoin platform Bridge in a deal valued at over $1.1 billion. The potential Coinbase-BVNK deal would have been nearly double the size of this deal. 

Despite the deal falling through, Coinbase maintains robust ties with stablecoin products and the stablecoin ecosystem. It holds a substantial stake in USDC issuer Circle, which launched its IPO recently. BVNK’s acquisition could have given Coinbase vertical integration to both issuance (via Circle) and enterprise distribution. The platform also released a stablecoin payments platform to help businesses modernize their financial operations while onboarding themselves to crypto rails. Coinbase has also acquired fundraising platform Echo and its token sale product Sonar, in a deal worth $75 million. 

The Growth Of Stablecoins 

Stablecoins have registered substantial growth over the past year, with their total market capitalization rising over $120 billion, according to data from DeFiLlama. The stablecoin ecosystem’s total market capitalization is currently $305 billion. Supporters of these assets say they can upgrade legacy financial infrastructure, make cross-border transactions faster, and reduce transaction fees. 

The rapid growth of these assets has caught the attention of big banks and payment networks. Mastercard was previously engaged in advanced negotiations with BVNK, and is now in discussions to acquire crypto and stablecoin infrastructure firm ZeroHash in a deal rumoured to be around $1.5-$2 billion. Other financial companies are also betting on stablecoins. Late-stage payments company Modern Treasury completed the acquisition of stablecoin startup Bean in a deal worth $40 million. Crypto companies are also exploring stablecoins. These include Aava Labs and the Monad Foundation.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.