Photo by Coinbase has officially called off its planned $2 billion acquisition of BVNK, a UK-based stablecoin infrastructure startup. The deal had advanced to the due diligence stage before both parties “mutually agreed to not move forward.”
News of the deal falling through has generated curiosity among crypto enthusiasts; many eyes had been monitoring its progress, as it was one of the largest deals ever for a stablecoin startup.
Why did Coinbase call off the BVNK deal?
Unfortunately, as at the time of this coverage, it hasn’t been made clear why the two companies chose not to move forward with the deal, even though they had both gone as far as entering into exclusivity in October, meaning the startup temporarily lost the right to entertain offers from other bidders.
Had the deal gone through, Coinbase would have paid about $2 billion as acquisition price for BVNK, which is nearly double the $1.1 billion the fintech icon Stripe paid to acquire the stablecoin startup Bridge in a deal that concluded in February.
“We’re continuously seeking opportunities to expand on our mission and product offerings,” said Coinbase’s spokesperson in a statement. “After discussing a potential acquisition of BVNK, both parties mutually agreed to not move forward.”
The botched deal was one of the high-value acquisitions targeting stablecoin infrastructure, an area Coinbase has been spending massively on during President Trump’s second term. Back in August, the exchange acquired derivatives trading platform Deribit for $2.9 billion and maintains a close relationship with its USDC issuer, Circle.
Stablecoin M&A is still at an all-time high
Coinbase has been on an M&A spending spree this year, and according to Brian Armstrong, the company’s CEO, the purpose of all the wheeling and dealing is to service the company’s core focus, which revolves around trading and payments.
Of course, it is not the only company doing this, and its massive deal with BVNK falling through does not affect the trend, nor does it look like it can discourage the other well-capitalized crypto natives who want to capitalize on the novel application.
Over the past year, stablecoin M&A has remained a hot trend in crypto and fintech, with proponents claiming stablecoins can upscale legacy financial infrastructure, speed up cross-border payments, and reduce transaction fees. They have been around for quite some time, but the big banks are only just waking up to their merits, setting off an unprecedented scramble for innovation in the sector.
Banks and the largest payments networks like Mastercard and Stripe have been exploring stablecoin acquisitions of their own. Mastercard, one of the most notable TradiFi companies to explore the stablecoin sector, previously expressed interest in acquiring BVNK but is now in discussions to acquire the crypto and stablecoin infrastructure company Zerohash for between $1.5 and $2 billion.
Smaller FinTechs and crypto companies are not left out of the race either, with the likes of Modern Treasury, the late-stage payments company, spending about $40 million on acquiring the stablecoin startup Beam.
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