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Fireblocks is leveraging its acquisition of First Digital to expand its existing payment features for providers to accept crypto payments.
Crypto custodian Fireblocks recently acquired stablecoin and digital assets payments technology firm First Digital for a reported $100 million. The deal reached between both parties was part cash and part equity. With this acquisition, Fireblocks now looks to expand its digital payments objectives. These include scaling support for business-to-consumer payments using USDC, Celo, and other stablecoins and crypto in the second quarter of the year.
Fireblocks chief executive officer Michael Shaulov, also weighed in on the recent development in a media session saying:
“The acquisition of First Digital gives us the opportunity to take stablecoins and crypto payments to the mass market. It will allow all of our 900 clients – and many more that [First Digital is] bringing to the table – the ability to accept payments in stablecoins, both for business to business, but most importantly for consumers.”
In addition, Shaulov also extolled the perceived comparative advantages that First Digital brings to the table. In his own words:
“What First Digital brings is an awesome product and extensive leadership and know-how in the payments domain.”
Shaulov also asserted that the stablecoin and digital assets payment facilitator is bringing a “very applicable” product to the mass market.
Chief executive officer at First Digital, Ran Goldi, described the development with Fireblocks as a natural fit.
Fireblocks & First Digital Have a Pre-established Working Relationship
According to Shaulov, the crypto infrastructure provider and First Digital have been in a payments-related working relationship since 2019. The latest deal comes a few weeks after Fireblocks raised $550 million in its latest funding round at a valuation of around $8 billion. The Series E fundraise, co-led by D1 Capital Partners and Spark Capital, also saw participation from a slew of other investors. These include General Atlantic, Altimeter, Index Ventures, and CapitalG, and Alphabet’s independent growth fund.
Fireblocks’ foray into consumer and cross-border payments seems like a strikingly unconventional path change for the company. This is because the crypto custody perceived platform’s orientation is institutionally focused. However, Fireblocks began increasing its scope and consolidating its partnership on the subject matter with First Digital during the Facebook Libra project. Back then, both companies were involved in the ill-fated stablecoin’s early days before it was later renamed to Diem.
“We started working on Libra together back in 2019; Fireblocks, from a secure wallet perspective, and First in terms of payment protocols on the blockchain. We think that between the PSPs [payment service providers] both companies work with, we probably have over 2 million merchants that we can serve in 2022.”
Before this acquisition, banks and larger fintech companies traditionally acquired crypto custody firms. Now, it seems like some of these custody firms, with well-heeled backing, are the ones doing the acquisitions. In fact, Shaulov indicated that First Digital is the first of many companies that Fireblocks intends to merge with.