In the past two months, over 200 million dollars in financing has been raised. What new trends are emerging in Web3 payments with the involvement of Sequoia, Temasek, and Tether?

Author: flowie, ChainCatcher

Editor: Marco, ChainCatcher

In the recently quiet Web3 market, Web3 payments have emerged as one of the more active sectors.

Solana, Binance, and Coinbase are all emphasizing Web3 payments.

Lily Liu, chair of the Solana Foundation, has been promoting the PayFi concept at major Web3 conferences such as EthCC this year, claiming that its market size may far exceed that of DeFi. Binance Research recently released a research report on Web3 payments titled “Blockchain Payments: A Fresh Start”, detailing the impact of blockchain on global payments. Coinbase's CEO also recently announced participation in a new track related to AI crypto payments.

Despite the overall downturn in the Web3 investment and financing market, Web3 payments have been one of the hottest financing sectors in the past quarter.

According to statistics from the Web3 asset data platform RootData, there have been 15 financing announcements in Web3 payments over the past two months, with a total financing amount exceeding $200 million, and large financing rounds occurring frequently.

ChainCatcher's statistics show that in the past two months, there have been a total of 11 financing rounds exceeding $30 million, with nearly 40% coming from Web3 payments. Among them, stablecoin payment platform Bridge and blockchain payment and settlement technology platform Partior both secured over $50 million in financing.

From the perspective of investors, recent financing for Web3 payment projects has attracted major players from various fields, including payments, stablecoins, and traditional finance. Visa, Tether, Circle, JPMorgan Chase, and Standard Chartered Bank are all eager to enter the space, while top-tier capital such as Sequoia Capital and Temasek are also placing their bets.

Stablecoin Payment Platforms Frequently Secure Large Financing

As of July, Web3 payments have announced at least 15 financing rounds, with 5 of them exceeding the $10 million mark, most of which come from stablecoin payment platforms.

Stablecoin payment platforms have generally launched their own fiat-backed stablecoins for cross-border payment networks, and some platforms are also committed to distributing certain returns to stablecoin holders.

Last week, stablecoin payment platform Bridge announced the completion of a $58 million financing round, with investors including Sequoia Capital, Ribbit Capital, Index Ventures, Haun Ventures, and 1confirmation.

Bridge provides solutions for businesses integrating stablecoin payments, issuing stablecoins, or cross-border payments. SpaceX and Coinbase have both utilized Bridge's services.

Fortune magazine reported that SpaceX uses Bridge to collect payments in different currencies across various jurisdictions and transfers them to its global treasury via stablecoins.

Coinbase uses Bridge's services to support transfers between USDT on Tron and USDC on Base.

Additionally, Bridge provides stablecoin technology services for Web3 companies such as the blockchain network Stellar and the Bitcoin payment application Strike.

Bridge processes annual payment volumes exceeding $5 billion.

According to Techcrunch, the two co-founders of Bridge previously co-founded the P2P payment platform Evenly in 2012, which was later acquired by the U.S. mobile payment leader Square.

Both co-founders have also worked at Coinbase, with CEO Zach Abrams having served as the consumer lead at Coinbase, and CTO Sean Yu having held senior engineering or engineering manager positions at Airbnb and Coinbase. Recommended reading: “Securing $58 Million, How Bridge Builds the Web3 Version of Stripe”.

WSPN (Worldwide Stablecoin Payment Network), which secured $30 million in seed funding, also focuses on stablecoin payments.

This round of financing for WSPN was led by Foresight Ventures and Folius Ventures, with participation from Hash Global, Generative Ventures, Yunqi Partners, and RedPoint China.

WSPN has launched WUSD, pegged 1:1 to the U.S. dollar, and compared to traditional stablecoins like USDT and USDC, WSPN aims to introduce yields, community governance, enhance user accessibility, and help ecosystem users achieve various asset allocations with stablecoins, including stocks, gold, crude oil, and commodity trading.

WSPN aims to grow its stablecoin user base to a scale of 1 billion and gradually replace the current mobile payment systems.

Similarly, the payment application Sling, which focuses on stablecoin payments, announced the completion of a $15 million Series A financing round, led by Union Square Ventures, with Ribbit Capital and Slow Ventures participating.

Sling aims to allow users to send money to almost anyone globally at a low cost. Sling has launched a self-custody wallet, where funds in users' wallets are held in the form of USDP. USDP is a digital currency issued by Paxos Trust Company LLC and regulated by the New York Department of Financial Services.

Sling is also committed to providing yield distribution for users holding USDP. Sling has launched apps on both Apple and Android, covering over 50 countries and regions, with Europe and Africa being its current core development areas. Recommended reading: “Securing Millions in Funding, How USV's Sling Profits from Stablecoin Cross-Border Transfers?”

IDA, which aims to achieve seamless payments between Hong Kong and global markets, was recently established and has secured $6 million in financing led by Hashed and CMCC Global, with participation from Hack VC, GSR, Kenetic Capital, and SNZ Holding.

IDA has also launched a fiat-backed stablecoin HKDA built on a public chain. IDA co-founder and CEO Lawrence Chu was the founder of venture capital firm BlackPine and a partner at Lever VC. Another co-founder and CSO Sean Lee was the CEO of the Algorand Foundation and a co-founder of Layer1 project Odsy Network.

Additionally, Kredete, which aims to help African immigrants build credit and send money home at low costs, has significantly reduced transfer fees to less than one dollar by using stablecoins. Kredete recently announced it secured $2.25 million in financing.

In July, cross-border payment platforms PEXX and Caliza secured $4.5 million and $8.5 million in financing, respectively, both supporting the use of USDT or USDC for instant transfers.

Stablecoins Are Becoming an Important Tool to Enhance Global Payment Systems

According to Binance's report “Blockchain Payments: A Fresh Start”, stablecoins processed transaction volumes exceeding $10.8 trillion in 2023. Excluding activities such as machine or automated trading, this figure is $2.3 trillion.

Binance Research indicates that when comparing stablecoin payments to traditional payments, stablecoin payments have been catching up with traditional payments in terms of quarterly transaction volume.

According to an analysis by the crypto-native investment and incubation community DAOSquare in “Stablecoins and the New Payment Landscape”,

even excluding activities such as machine or automated trading, the transaction volume processed by stablecoins in 2023 accounts for about one-fifth of Visa's payment volume and exceeds one-quarter of Mastercard's, representing significant growth since the advent of stablecoins.

Historically, the main use case for stablecoins has been to allow crypto investors to trade digital assets between centralized and decentralized exchanges. However, with payment giants integrating stablecoins and the rise of some stablecoin payment platforms, stablecoins are infiltrating the global payment market.

This week, global cross-border payment network Ripple announced that its stablecoin RLUSD will launch in the coming weeks. In August, Tether strategically invested in Kem, which focuses on cross-border payments, and Kem will launch USDT on its platform to promote the widespread adoption of USDT in the Middle East.

In April this year, payment giant Stripe announced the integration of cryptocurrencies again after six years, prioritizing support for USDC payments. At the end of June, Stripe reached a strategic partnership with Coinbase to introduce USDC payments on the Base platform. Previously, payment giants such as PayPal, Visa, and Mastercard have also announced related stablecoin plans.

AI Crypto Payments Become an Innovation Hotspot

In addition to stablecoin payments, AI-based crypto payments have also become a major innovation trend.

On August 31, Coinbase CEO Brian Armstrong announced the first AI-to-AI crypto transaction on the Base network, stating that AI Agents can now use USDC to transact with humans, merchants, or other AIs on Base, with these transactions being instantaneous, global, and free.

Coinbase's AI crypto payment plan has been in preparation for a long time; as early as May this year, Brian Armstrong stated that "self-custody crypto wallets will support AI Agents."

Recently, AI crypto payment-focused companies Skyfire and Payman have also received funding support from leading institutions.

On August 23, Skyfire secured $8.5 million in seed funding from Circle, Ripple, Gemini, and the well-known Silicon Valley billionaire and Bitcoin advocate Tim Draper's venture capital firm.

Skyfire was founded by two former Ripple developers. It is an open-source payment system that allows autonomous AI Agents to purchase any goods needed to complete specified tasks on the internet—from data storage and creative assets to airline tickets and groceries. All these transactions will be supported by the stablecoin USDC.

PaymanAI, on the other hand, secured $3 million in funding from Visa, Coinbase Ventures, Boost VC, Deepwater Management, The Spartan Group, Untapped VC, and Theory Forge VC.

Payman aims to enable AI Agents to make payments to humans using various methods, including fiat currency, cryptocurrencies, and bank accounts. Payman supports both fiat currency and USDC payments. Payman's founder, Tyllen, previously worked as a product manager at Meta and later served as the developer relations lead at Dapper Labs and Uniswap Foundation.

Compared to the above AI crypto payment projects that provide interfaces and services for payments between AI Agents and humans, some projects are attempting to create AI Agent products with payment functionalities for ordinary users.

AI Agent wallet Bitte from the Near ecosystem and the AI interaction protocol Wayfinder incubated by the blockchain game Parallel are making such attempts. They both aim to integrate OpenAI's model API, allowing users to command Agents to perform various on-chain operations through a chat window interface similar to ChatGPT. Recommended reading: “Coinbase Enters the AI Payment Track, What Other Projects Are Adding Wallets for Agents?”

Compared to stablecoin payments, AI crypto payments are still in the early stages and are expected to require longer validation periods and the emergence of more innovative players.