American cryptocurrency exchange Coinbase has scrapped its plans to acquire the stablecoin infrastructure firm BVNK. A Coinbase spokesperson confirmed this Tuesday, November 11, that after negotiations, both parties mutually agreed not to move forward with the deal. The acquisition, which had entered exclusive negotiations, was valued at approximately $2 billion, according to reports.
BVNK, a UK-based fintech firm, specializes in helping companies integrate stablecoin payments. Mastercard had also been in advanced discussions to acquire BVNK before Coinbase began exclusive negotiations. The startup had raised $50 million last December at a $750 million valuation. Additionally, payments giant Visa made a strategic investment in the firm earlier this year, though the amount was not disclosed.
The $2 billion price tag would have represented a significant premium in the sector. It surpasses Stripe’s recent acquisition of the stablecoin platform Bridge, which was completed in February for $1.1 billion. The news that Coinbase abandons BVNK acquisition is notable given the high value of the proposed transaction and the explosive growth of the stablecoin market, which has added $120 billion in capitalization over the past year.
Why is Coinbase backing away from vertical stablecoin integration?
Coinbase’s decision not to proceed is interesting, given its deep ties to the stablecoin ecosystem. The exchange already holds a major stake in Circle, the issuer of USDC. Analysts had noted in October that purchasing BVNK could have provided Coinbase with “vertical integration,” allowing it to own both issuance (via Circle) and enterprise distribution (via BVNK).
Even though Coinbase abandons BVNK acquisition, the exchange continues to strengthen its own payments infrastructure. Last month, Coinbase launched a stablecoin payments platform designed for companies to modernize their financial operations. It also recently completed the $375 million acquisition of the fundraising platform Echo.
The total stablecoin market currently stands at $305 billion. Although the withdrawal from this deal halts a major consolidation, Coinbase remains focused on its internal stablecoin products. Meanwhile, the future of an acquisition of BVNK by another large entity, like Mastercard, is now up in the air following the end of exclusive negotiations.
