Stripe, one of the world's largest payment operators, has acquired Bridge, a start-up that has developed a platform facilitating payment in stablecoins, for $1.1 billion. What do you think?
Varun Paul: Stripe's interest in stablecoins really validates the impact of this technology on a larger scale. Firstly, it shows that they see stablecoins as a key part of the future of payments.
The high valuation also underlines their belief in its potential for their business model. We have seen stablecoins become a cornerstone of cross-border transactions, enabling secure and efficient transfers of value without currency volatility.
At Fireblocks, we are betting heavily on this technology. More than half of our transaction volume comes from stablecoins. This trend illustrates users' interest in stablecoins, both as a bridge for crypto transactions and increasingly as a direct payment tool.
And today, where is the adoption among traditional institutions?
We're just getting started. The rise of stablecoins for payments and as a reference asset in crypto transactions indicates a broader adoption curve. Institutions are increasingly interested in using digital assets beyond trading, whether for loyalty programmes, payments or other use cases.
What we are seeing now is that innovations from the crypto world are starting to integrate into traditional finance. Stablecoins, in particular, represent the first real "flagship use case".
Why stablecoins in particular, and not other types of crypto assets at the moment?
At the Bank of England, as regulator, we had concerns about the volatility of cryptocurrencies; they simply didn't meet the stability requirements of traditional payment systems.
Stablecoins, on the other hand, maintain a stable value, making them much more viable for payments and transfers, without the risks associated with volatility.
Their impact is particularly strong in areas where the traditional banking system is limited, especially for cross-border payments. For example, international transfers cost around 6% in fees via services such as Western Union or MoneyGram. Stablecoins make it possible to carry out these transfers much more affordably and quickly.
For businesses, the speed of stablecoin transactions - a few minutes instead of several days via the traditional banking system - is a huge advantage. The liquidity advantage of these fast end-to-end transfers is revolutionary.
Stablecoins are also attractive because they give banks an important role in the digital ecosystem. Banks see the growth of stablecoins like USDT and USDC and recognise a revenue opportunity, because although stablecoins don't pay interest, their supporting assets often do.
Finally, they will be essential for exchanging tokenised assets. Fireblocks is actively working with major banks around the world to support the issuance of stablecoins. For example, we recently announced our collaboration with Bank Colombia in Latin America on a stablecoin project.
Just where does Fireblocks fit into the stablecoin transaction process?
We help financial institutions to securely issue, manage and develop stablecoins, such as USDC or EURC, Circle's two stablecoins. The aim is to create a secure bridge between the traditional and digital financial worlds.
Security has long been an obstacle for traditional institutions. Fireblocks brings advanced technology, such as multi-party computation and deep cryptographic layers, offering institutions a secure way to hold digital assets.
In the past, vulnerability to hacking was a major barrier. With solutions like ours, these institutions can finally enter the crypto space without these risks. In recent years, the demand for secure digital asset solutions has only grown.
Regulation is also playing a very important role in this adoption...
It is crucial. MiCA in Europe is leading the way by defining stablecoins as payment tokens rather than speculative assets. This means that they are supposed to maintain a stable value, be redeemable at their face value and not generate interest.
If they were to generate interest, they would be considered more like deposits, then falling under banking regulation. As a result, stablecoins are recognised in these regulated jurisdictions as non-yielding assets specifically intended for payments, aligned with their role as stable and transactional tokens rather than speculative.
Fairly, do you think this strict regulatory separation between yield-generating assets, such as funds, and money-like assets such as stablecoins or e-money, will continue?
That's a good question. Regulators want to maintain this separation because traditional financial systems were designed with very distinct roles for banks.
Banks don't just hold funds; they stimulate economic growth by transforming deposits into credit through lending. Without this lending, there would be no credit creation to fuel many sectors of the economy.
This system is rigorously regulated to prevent banks going bust as much as possible. If you offer interest, you are essentially operating like a bank, which implies banking regulation.
But don't tokenised money market funds that offer returns erase this distinction?
Money market funds are effectively capital market assets, and although they carry risks, they have been present in wholesale markets for years.
If they become accessible to retail investors via blockchain, they must be meticulously managed to ensure their stability and avoid excessive risk.
Historically, some funds have lost their parity due to poor risk management.
Blockchain can certainly make these funds more accessible and efficient, but the regulations remain clear: stablecoins are for payments, backed by stable assets and redeemable at parity, while return assets such as tokenised deposits or money market funds belong in a different category with their own regulatory standards.
Although adoption is accelerating, we still see a lot of experimentation taking place on private blockchain. Will public blockchains finally win out?
What we need to understand is that current banking regulations tend to favour private blockchains, due to concerns about governance and security on public blockchains. However, this is an outdated view.
A watershed moment came when BlackRock issued a money fund on Ethereum in March, a public blockchain. This sets a precedent that could lead regulators to reconsider their position on them.
Private blockchains offer certain advantages, but they do not allow you to take full advantage of decentralisation. To really exploit the benefits of blockchain, a unified ecosystem is needed where liquidity is not fragmented across multiple isolated networks.
Initiatives such as Chainlink and Layer Zero are making great strides towards interoperability, allowing different blockchains to connect and share liquidity. This development is crucial for large institutions, and I expect to see more of it next year.
You have a presence all over the world. Which regions are the most dynamic in terms of adoption?
Latin America, particularly Brazil, stands out for its regulatory openness, which enables adoption by both individuals and institutions. The United Arab Emirates is also moving quickly.
In Asia Pacific, South Korea and Japan are emerging leaders, and some Australian banks are already issuing stablecoins.
Over the next year, I expect these regions to see even greater growth as their regulatory environments mature.
Today, more and more players are looking to launch their wallet. How will you stand out from the competition in the long term?
The wallet landscape is becoming increasingly competitive, that's true. And some, like Gnosis with Safe , are trying to become fintechs of sorts on blockchain.
Firstly, I think it's worth remembering that Fireblocks is more of a technology provider than just a wallet.
Today, through our open platform, we offer crypto custody, but also a platform to support digital assets, payment, tokenisation via our own smart contracts and those of our partners, AML (Anti-Money Laundering) and KYT (Know Your Transaction) compliance, as well as access to Web applications3.
Our vision is to enable any business to interact with digital assets seamlessly and securely, with a foundation built on cyber security. Since our launch, we have taken a 'security first' approach, which sets us apart from the rest.
For example, last year we published Bitforge , which highlights the vulnerabilities of multi-party computation, a critical technology in digital assets, while raising industry security standards.
Despite the proliferation of wallets, one major challenge persists in my view: how to secure these digital assets against piracy? Unfortunately, we still hear of incidents where assets are stolen due to inadequate technology or processes.
It is therefore essential that the industry raises its security standards, and I think we will see improvements and even consolidation in the next few years, possibly driven by regulation.
Read our report - The future of wallets
You also mentioned being an "open platform". Can you explain what that means?
To clarify - it's not an open, permissionless platform like Uniswap. Fireblocks is a SaaS (Software-as-a-Service) platform where customers subscribe on which our services, accessing not only our products, but also our ecosystem of partners.
For example, for tokenisation, we support not only Fireblocks smart contracts, but also those of partners, offering flexibility and choice to our users.
It's a collaborative model. It allows us to grow alongside the digital asset ecosystem by working with some of the best companies driving digital asset adoption and tokenisation.
So you're more in an ecosystem mindset?
Exactly. We want to be the entry point for any company, whether it's a startup or a large institution like Revolut or BNY Mellon, with whom we work.
Our open, all-in-one platform allows users to interact with all types of digital asset usage in one place.
But to come back to the previous question, many players such as Gnosis with Safe or Etherfi have wallet solutions or are in the process of developing one.
Beyond security, how do you see wallets evolving?
Their development is extremely interesting. Even today, using them remains very complex for newcomers to crypto, a bit like the internet in its early days.
But as use cases develop and the market matures, we will see simplification.
I imagine a future where all payment methods - digital and traditional - are seamlessly integrated into a single wallet, allowing seamless transitions between credit cards, debit cards and digital wallets, without users noticing the difference.
Does this mean that wallets could one day accommodate various types of 'currencies', such as stablecoins, CBDCs or tokenised deposits?
Absolutely. We already use various types of currency today, and I expect this to continue. Central bank digital currencies (CBDCs), stablecoins, cryptos and tokenised deposits will probably coexist, each serving unique purposes.
The challenge will be to integrate these different forms into a single wallet, so that users can access and use them intuitively.
You mentioned a Web3 vision where users themselves control their assets. Could you expand on this concept?
We are developing what we call a "direct custody model" or "integrated wallet".
In this model, the user has direct control over their private key, unlike today where institutions often manage custody on behalf of the user.
This model empowers users without placing the entire burden of security on them.
Globally, our model is based on a "triangle of trust" involving three parties: the technology provider (Fireblocks), the wallet provider and the user.
If a user forgets their password, they can recover it via the wallet provider, in the same way as current Web2 solutions.
If the wallet provider encounters operational problems, the user can recover their private key via Fireblocks and switch to another wallet provider.
This setup is robust: the user retains direct control of their funds at all times, with no financial exposure to the wallet provider or technology provider.
In addition, because the asset is issued by a third party - for example a stablecoin issuer or central bank - the user retains independent ownership. It's a powerful and resilient solution, and we're just beginning to explore its full potential for the future.
Do you think that with solutions like yours, self-custody can become the norm?
That's an excellent question. There are most likely several types of provider, each offering specific services.
Just as we once had separate bank accounts and safe deposit boxes for different needs, I think we will rely on different entities for different aspects of asset custody.
But what should evolve, and where I see convergence, is in the user interface - a simple, streamlined interface that can integrate with different solutions.
This is not a new concept; we've seen it with payment aggregators that bring together bank accounts, credit cards and other financial tools into a single interface.
I imagine a future where, whether through a mobile app or a self-custody model, there is an accessible front door for users to manage everything, hiding the complexity.
And where do we stand on the security of wallets on smartphones? Even today, many experts still advise against using a wallet via your phone...
Interestingly, a key part of our technology uses the secure enclave in smartphones, the same secure area that manages Face ID, for example.
This secure enclave enables digital assets to be managed with a very high degree of security. This technology is even used by major financial institutions in our security layers.
This allows users to manage assets on their phones in a very secure way, complemented by biometrics, which offers additional protection. So, I would say that the mobile phone is indeed an essential piece of the security solution for wider adoption.
In this regard, when do you see mass adoption - where it would become normal to pay with stablecoins or buy cryptocurrencies via a traditional bank for example?
I would say within five years. By the end of this decade, we will probably see major financial institutions offering these services and wider adoption among individual users, which will push central banks and regulators to become more comfortable with digital assets.
This will drive even more advanced tokenisation of financial assets and even central bank digital currencies, which will gradually be integrated onto the blockchain.
Aside from financial tokenisation, do you think there are other factors that could accelerate this adoption?
Yes. AI (Artificial Intelligence) is a major factor. Over the past two years, AI adoption has progressed much faster than expected, leading to the emergence of AI agents and bots that optimise various aspects of our lives, including financial management.
These AI systems will require far more sophisticated payment interactions than current systems can handle, but blockchain technology - with its ability to handle complex messages, programmable assets and smart contracts - is well suited to this level of interaction.
So, I think the adoption of AI will indirectly drive the adoption of digital assets and blockchain technology.
Today, how many customers do you have?
Fireblocks currently has more than 2,000 institutional clients on its platform, which we have developed over the past five to six years.
In terms of assets, we have secured more than six trillion dollars in digital asset transactions. To put that in perspective, that's around two to two and a half times the total capitalisation of the cryptocurrency market, which is a figure we're proud of.
Our customer base has grown by around 40-50% this year alone, and transaction volumes on the Fireblocks network have jumped by around 80% in the last 12 months.
We're seeing growth not only with existing customers, but also with new brands turning to Fireblocks to get into digital assets.
Fireblocks is known for using MPC (Multi-Party Computation) technology. Do you think this is the best technology available, or are you exploring other options for the future?
We believe that MPC is indeed a very robust technology that has proven itself through the vast amounts of transactions we have already managed as well as the customers we have today. But obviously, there's a lot of room for improvement. We're going to be announcing quite a few things in the coming months.
Can we find out more?
For the moment, we can't talk about it publicly.
This could be my last question. In Europe, there is currently a major debate about classifying wallets, technology providers and service providers under the same regulation as custodians. How does Fireblocks position itself in relation to this?
Personally, I don't think it's wise to take bets with regulation. In my opinion, it's essential to work closely with the regulators, because they're the ones who set the rules.
Based on everything we've built up to now, Fireblocks is a technology provider, not a custodian as such. We have specific protections in place that support that classification.
Fundamentally, as I mentioned, our customers are always in control of their assets - they own them in every case. Some competing solutions take possession of assets or assume certain responsibilities, which could lead regulators to classify them as custodian.
So you're sure Fireblocks won't be reclassified as custodian?
Exactly. We see ourselves as a technology provider, which is more aligned with how regulators view cloud providers, for example.
We are seen more as an operational service provider for these institutions rather than a financial risk entity, so we are not considered custodians under these regulations.
So this means that certain regulations in Europe such as DORA (on digital operational resilience) are not required for Fireblocks?
We are actively engaged with regulators in this area, and we anticipate that DORA will have an indirect impact on us.
However, we already operate to high standards, so this is not a concern. Our aim is to ensure that any financial institution using our technology is fully compliant and that we meet all regulatory expectations.
If regulators want more engagement, we're here to work closely together and ensure that everyone meets the highest standards.
Today, it's almost certain that the European Central Bank will launch a central bank digital currency (MNBC) for retail customers. Do you believe in its viability?
I do believe there will be retail MNBCs. Let me explain why.
Starting with wholesale MNBCs, as you mentioned, they are quite practical - they could make interbank transactions faster, cheaper and smoother by offering a lower-risk method of settlement.
The crucial point here is who issues the currency and the level of risk involved. Globally, central banks or governments are generally seen as lower-risk issuers, as they are backed by the state, which can print its own money.
In contrast, stablecoin issuers or banks are private entities, each with their own credit and operational risks.
If a bank experiences financial difficulties or a stablecoin issuer mismanages assets, the value could fluctuate. As such, central bank money is considered the lowest risk asset in any economy.
Do you think that retail MNBCs could eventually replace stablecoins?
No, I don't think so. On the contrary, I see it as one piece of a diverse ecosystem. Stablecoins are currently doing a great job, stimulating innovation and enabling features such as cross-border transactions and accessibility in remote areas.
Tokenised deposits will also play a role, offering different risk profiles. Just as we have a variety of payment methods today - debit cards, bank notes, digital transfers - I think users will always want options for different needs.
Remember 2019, when Facebook announced Libra - there was a worry that it could dominate the system overnight, with billions of users on a single network.
This would have meant huge control in the hands of a private entity, which, while innovative, raises concerns about data use and privacy.
Private companies drive fantastic innovation, but there is also a role for state-backed money to provide balance and choice.
How do you see a retail MNBC working in the digital ecosystem?
The key is compatibility. A retail MNBC should work alongside other digital assets. For example, it should be storable in the same wallet where users hold NFTs, notes or stablecoins. This is essential for long-term adoption. In Europe, there is some divergence from this vision, but if central banks want their MNBC to remain relevant in five to ten years' time, it needs to integrate seamlessly with the rest of the digital asset ecosystem.
So it could act as a back-up option?
Yes, it could fulfil several roles. Maybe it would be a privacy-focused, zero-cost payment option, or maybe it would be the designated way to pay taxes.
If it's useful, people will adopt it; if not, they'll continue with stablecoins, tokenised deposits, and other payment methods. But I think it will find a use in the puzzle of digital assets.
