Coinbase has reached an agreement with UK-based stablecoin infrastructure BVNK to cancel the $2 billion acquisition of the company. The deal, which had been ongoing for a while, had reached the due diligence stage before both parties agreed not to proceed. The news of the deal falling through has generated buzz, with many enthusiasts questioning the reason despite the progress of talks.
According to reports, the deal was on track to become one of the largest ever deals involving a stablecoin startup. Unfortunately, at this time, neither company has released any statement noting the reason why the deal was called off. Both companies had initially entered the exclusive stage in October, which meant that the stablecoin startup could not entertain offers from other bidders.
BVNK’s deal with Coinbase collapses
If the deal had gone through, Coinbase would have paid about $2 billion to acquire BVNK. The figure would have been nearly double the $1.1 billion fintech startup Stripe paid to acquire stablecoin startup Bridge back in February. “We’re continuously seeking opportunities to expand on our mission and product offerings,” said Coinbase’s spokesperson in a statement.
The spokesperson noted that after discussing a potential acquisition of BVNK, both parties mutually agreed not to move forward with the deal. The collapsed 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.
Meanwhile, 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. It is not the only company doing this, and its massive deal with BVNK falling through does not affect the trend.
In addition, the collapsed deal is not expected to 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.
However, the company 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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