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Avalanche Could Become Big Player as Stripe Follows Up Stablecoin Purchasing With AVAX Link

Published April 30, 2024 7:34 AM
Teuta Franjkovic
Published April 30, 2024 7:34 AM
By Teuta Franjkovic
Verified by Peter Henn

Key Takeaways

  • Stripe has expanded its cryptocurrency offerings by integrating AVAX and the Core platform into its services.
  • Users can now directly purchase AVAX via Stripe, along with decentralized applications and NFTs.
  • This collaboration with Stripe could drive increased traffic to the Avalanche ecosystem and boost interest in Web3.
  • The move comes after Stripe announced it would accept crypto payments for the first time in six years.

The Avalanche C-Chain network has teamed up  with payment company Stripe, allowing verified Stripe users to purchase AVAX and transfer it directly to their wallets.

Avalanche could profit big time from this initiative, which comes after Stripe said it would accept crypto payments for the first time in six years. The payment processor will be taking the USDC stablecoin.

Avalanche Heats Up With Eight Apps Now Buying Crypto with Stripe

Avalanche developer Ava Labs announced the partnership in an April 29 blog post . Additionally, eight Web3 applications built on Avalanche have also been integrated with Stripe.

According to the announcement , Avalanche app developers can put a customizable Stripe widget into their platforms. This widget allows users to convert fiat currency into cryptocurrency directly within the app interface.

Eight applications on the Avalanche network have already committed to integrating this new feature. These include:

  • The Avalanche Core portfolio app.
  • Staking protocol GoGoPool.
  • Avvy username service social media platform The Arena.
  • Non-fungible token (NFT) marketplace Zeroone.
  • The Halliday wallet, The Pakt web development platform

Blockchain games DeFi Kingdoms and Shrapnel also use the widget, which aims to enhance user experience by streamlining the buying and using AVAX across applications.

Integrating Stripe to Solve Web3’s “Cold Start Problem”

The C-Chain and Stripe’s integration is designed to address  the “cold start problem ” in Web3. This problem arises when users don’t have enough funds in their wallets to take part in transactions on a platform. By incorporating Stripe’s services, the integration aims to speed matters up by handling all aspects of KYC (Know Your Customer), payments, fraud, and compliance. This allows developers to concentrate on making their apps better, rather than managing logistical challenges.

At the time of the launch, the integration lets Core portfolion app users create Avalanche accounts with their Google or Apple IDs. They can also fund these accounts through bank transfers, or using debit or credit cards.

Akash Gupta, the head of consumer products at Ava Labs, commented  on the potential impact of this integration, stating that it is expected to significantly boost cryptocurrency adoption globally.

He said :

“Core’s integration with Stripe is just another step that underscores our dedication to providing users with intuitive and streamlined solutions. By further bridging the gap between crypto and fiat, Core continues to pave the way for seamless onboarding and broader consumer adoption of digital currencies in everyday transactions.”

Stablecoin Pivot Targets Growth and Regulatory Edge

Stripe’s recent re-entry into the cryptocurrency payment space after a six-year hiatus highlights a strategic pivot to stablecoins, specifically by choosing USDC over Bitcoin. This move positions Stripe as a potentially significant player for USDC issuer Circle, especially at a time when the leading stablecoin, Tether (USDT), faces regulatory and competitive pressures.

With a market capitalization  significantly trailing Tether’s  $100 billion, USDC could close the gap, given Stripe’s substantial transaction volume. In 2023, Stripe processed over $1 trillion in transactions. This could translate into a shift in stablecoin usage if even a small percentage of it is converted into stablecoin transactions.

Furthermore, Stripe’s selection of USDC could reflect strategic positioning within a US regulatory environment that appears increasingly challenging for non-US-based stablecoins like Tether. Tether, based in the British Virgin Islands, has come under scrutiny from US lawmakers for alleged deficiencies in its anti-money laundering practices. Proposed stablecoin regulations could potentially favor US-based issuers like Circle. This, therefore, makes Stripe’s integration of USDC not only a business decision but also a regulatory hedge.

Stripe’s work with USDC might significantly boost the stablecoin’s adoption. It also poses a credible threat to Tether’s current market dominance, suggesting a possible global shift in stablecoin usage.

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