Mastercard has its sights on another crypto company. The payments goliath is said to be in late-stage talks to acquire the crypto and stablecoin infrastructure startup Zerohash for between $1.5 and $2 billion, according to five sources familiar with the deal, who asked for anonymity to discuss private business discussions. The deal may still fall through but, if closed, it would represent one of Mastercard’s biggest bets yet on stablecoins, or cryptocurrencies pegged to underlying assets like the U.S. dollar.
Founded in 2017, Chicago-based Zerohash builds stablecoin and blockchain infrastructure, including enabling payments and crypto trading. The potential acquisition follows previous discussions Mastercard had with the stablecoin startup BVNK. The payments network and Coinbase were in late-stage talks to acquire the startup for around $2 billion, according to six sources familiar with the negotiations. Coinbase appears to have won the bidding war and is in exclusivity with the company, meaning that BVNK can’t entertain offers from other bidders, according to three sources familiar with the matter.
Spokespeople for Mastercard, Zerohash, and Coinbase declined to comment. A spokesperson for BVNK did not immediately respond to a request for comment.
Stablecoin fever
As the crypto industry’s fortunes have soared over the past year, stablecoin companies have emerged as one of the sector’s hottest categories. After the payments firm Stripe acquired the stablecoin startup Bridge for $1.1 billion, a slew of other venture rounds and acquisition talks followed.
Stripe’s purchase of Bridge and Coinbase’s talks with BVNK represent massive bets on stablecoins, and crypto more broadly, as the future of payments. Proponents argue that stablecoins offer advantages over traditional rails like wires and SWIFT, with blockchain technology able to settle transactions at faster speeds and with lower processing costs. Still, the infrastructure to support that future is still immature, and larger companies like Coinbase, Mastercard, and Stripe have sought startups that can help build out their new product offerings.
Bridge and BVNK are more focused on stablecoins, allowing companies to use cryptocurrencies like USDC and Tether for use cases such as global payroll and treasury management. Zerohash supports broader product offerings, including helping companies spin up their own crypto trading platforms as well as APIs for tokenization, or putting traditional financial assets in blockchain wrappers. Backed by a slew of investors, including Interactive Brokers, Apollo, Point72 Ventures, and Nyca, Zerohash raised a $104 million funding round in September at a $1 billion valuation.
Though stablecoins could theoretically upend Mastercard’s business model of taking a small cut, or interchange fee, on transactions, the payments incumbent has long been active in crypto, including acquiring the blockchain analytics firm CipherTrace in 2021. However, it later shut down many of CipherTrace’s key products. In recent months, Mastercard has pushed further into stablecoins, including joining a consortium, which includes Robinhood and Kraken, focused on the technology.
