Mastercard’s Latest Crypto Move: Exploring Acquisition Of Zerohash For $2 Billion

According to a report by Fortune, Mastercard is reportedly in advanced discussions to acquire Zerohash, a startup specializing in crypto and stablecoin infrastructure, for an estimated $1.5 to $2 billion.

Mastercard’s $2 Billion Bet On Zerohash 

Founded in 2017 and based in Chicago, Zerohash focuses on building stablecoin and blockchain infrastructure, facilitating payments and crypto trading. Should this acquisition proceed, it would mark one of Mastercard’s largest investments in the stablecoin sector.

This potential move follows Mastercard’s earlier conversations with BVNK, another stablecoin startup, where it was reportedly in talks to acquire the company for around $2 billion. 

However, those discussions appear to have concluded with US-based cryptocurrency exchange Coinbase winning the bidding, placing the startup in an exclusivity agreement that prevents BVNK from considering other offers.

Additionally, companies like Mastercard, which are traditionally linked to the broader financial landscape, have entered the stablecoin market. Giants like Citi and JP Morgan are following suit after the passage of the GENIUS Act for stablecoins in the US. 

The recent acquisition of Bridge, a stablecoin startup, by payments company Stripe for $1.1 billion has spurred further interest and investment in this area. Both Stripe’s purchase and Coinbase’s negotiations with BVNK signify a strong commitment to integrating stablecoins and cryptocurrency into future payment systems. 

Rising Interest In Stablecoins

The report also highlights that advocates for stablecoins argue they offer several advantages over traditional transaction methods, such as wire transfers and SWIFT, including faster transaction speeds and lower processing costs. 

However, the infrastructure necessary to support this emerging future remains underdeveloped, prompting major players like Mastercard, Coinbase, and Stripe to seek partnerships with startups that can enhance their product offerings.

Zerohash distinguishes itself by providing a broader range of services, enabling companies to establish their own crypto trading platforms and offering Application Programming Interface (APIs) for tokenization, which involves converting traditional financial assets into blockchain-compatible forms. 

Backed by investors such as Interactive Brokers, Apollo, Point72 Ventures, and Nyca, Zerohash recently completed a funding round of $104 million at a valuation of $1 billion.

While the rise of stablecoins has the potential to disrupt Mastercard’s traditional business model—relying on collecting interchange fees from transactions—the company has remained active in the crypto space. 

This includes its acquisition of the blockchain analytics firm CipherTrace in 2021, although it later discontinued many of CipherTrace’s primary products. Recently, Mastercard has intensified its focus on stablecoins, showcased by such acquisitions in line with the broader interest in not only this sector of the industry, but also crypto-focused exchange-traded funds, and digital asset treasuries by the world’s largest asset managers.

Featured image from DALL-E, chart from TradingView.com