Fortune says that Coinbase has officially stopped talking about buying BVNK, a stablecoin and payments business based in the UK that was allegedly worth between $1.5 billion and $2.5 billion. The partnership, which had reached an exclusivity stage in October, was supposed to change the way people pay online, but it’s no longer happening.
A spokesman for Coinbase said that talks with BVNK have stopped, but they didn’t say why. The decision startled some who follow the industry because the acquisition might have greatly increased Coinbase’s presence in cross-border payments and merchant services.
A Missed Chance to Grow Stablecoins
The purchase would have been one of Coinbase’s biggest steps outside of crypto trading. As banks and other financial institutions start to use blockchain-based settlement systems, the market for stablecoins and cryptocurrencies is increasing quickly. BVNK’s platform lets retailers accept both types of payments.
Coinbase was already a co-issuer of the USDC stablecoin through its cooperation with Circle. People thought that Coinbase was getting set to compete directly with existing payment networks like Mastercard and Visa. Reports said that Coinbase had outbid Mastercard in previous phases of the negotiations but then backed down.
Making money from more than just trading fees
Coinbase’s increasing use of stablecoins is a key part of its plan to diversify its income. Coinbase’s third-quarter report said that about 20% of its income came from operations related to stablecoins. This number is projected to climb as the company adds more payment options.
The BVNK merger would have helped Coinbase’s current efforts, which include working with Shopify and Citigroup, to make stablecoin transactions easy for both businesses and consumers.
What's Next for Coinbase
Even if the acquisition is on hold, Coinbase is still working on new ways to make payments around the world. Brian Armstrong, the CEO, indicated recently that U.S. senators are “90% aligned” on crypto market structure legislation. This could make it possible for stablecoins to be used in regular money transfers.
The end of the BVNK talks may put Coinbase’s plans for a payment network on hold for now, but it shows that the company wants to grow slowly over time rather than quickly.
