Stripe's Bridge Is Becoming a Federally Chartered Bank

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Introduction

Welcome to the Tokenized newsletter, brought to you by the creators of the Tokenized Podcast Simon Taylor of Fintech Brainfood, Pet Berisha of Sporting Crypto, and Shwetabh Sameer of Molten Ventures.

We are the newsletter for institutions that need help preparing for a Tokenized future.

We run through the headlines every week, what it means for you and a market readout. Always with an institutional, business-focused perspective. 

Join us every week as we meet your Tokenization needs.

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In This Week's Edition:

💬Simon's Market Readout: Bridge, Stripe's $1.1 billion stablecoin acquisition, just received conditional OCC approval for a national trust charter

🏛️ NY Fed Reframes Stablecoins as Narrow Banks - Staff Report 1179 builds a formal economic model showing stablecoins and tokenized deposits have fundamentally different effects on credit creation and the broader economy. At $250B+ in stablecoin supply, the credit contraction question stops being theoretical.

🚀 Payoneer Taps Bridge (Stripe) for Stablecoin Roll-Out -The NASDAQ-listed cross-border payments platform will embed stablecoin capabilities for its nearly 2 million active business accounts across 190+ countries, powered by Bridge. This is the third major cross-border payments company in six months to choose Bridge as its infrastructure partner. And the distribution-over-issuance thesis continues to compound.

🚀 Starknet Adds EY Nightfall for Private Institutional Payments - StarkWare integrates EY's zero-knowledge privacy layer directly into Starknet, targeting the single biggest blocker keeping institutions off public rails: transaction transparency. 

Simon’s Market Readout 💬 

Bridge - Stripe's $1.1 billion stablecoin acquisition - just got conditional OCC approval for a national trust charter. And they're not alone. Companies have been rushing for charters: Ripple, Paxos, BitGo, Circle, and many others. So why is everybody rushing to be regulated?

It means Bridge and others can now operate their own custody, stablecoin issuance, reserve management, and orchestration across blockchains - with direct federal supervision. It also means that if the Federal Reserve ever makes skinny payment accounts available, they'd be able to settle directly with the central bank. That means better economics, and stablecoins would be able to off-ramp directly to central bank money - making them far more stable and sound.

This puts Bridge in a fascinating position. They already provide branded stablecoins for Phantom, MetaMask, Hyperliquid, and Klarna. But this federal trust charter gives them a regulated backbone that puts them in a different league of potential clients - financial institutions, large corporates, and many others.

A word of caution though. Conditional approval is only step one. The harder part is the 18-month organizational phase - proving they can operate a federally chartered bank through mock and live exams. Getting conditional approval is arguably the easy part. Surviving live exams and keeping your charter? That's much, much harder. The credibility of being regulated is earned, not given.

The bank lobby is already pushing back. The American Banking Association sent a letter to the OCC last week urging them to slow approvals down. But where lobbies see a threat, I see massive opportunity - for the banks themselves.

I fundamentally view stablecoins as different to deposits. Stablecoins are money that moves and settles 24/7, instantly. That's a way of moving money - not a replacement for deposits. Deposits are money that rests and earns yield. Yes, Coinbase and others are offering yield on stablecoins. But the vast majority of consumers want their bank. A recent YouGov poll with Artemis found 77% of consumers want their bank to be their stablecoin provider. And the vast majority of stablecoins convert back to fiat within one to two weeks. So what are you actually fighting against - a perceived threat or a real one?

Fighting with fear is the wrong approach. There's $308 billion in stablecoins in issuance. There's already an infrastructure race. There's already a licensing race. The smart banks are the ones that lean in and build new revenue lines - recognizing the fundamental difference between money at rest and money in motion.

Stories You Can't Miss 📰

🏛️ NY Fed Reframes Stablecoins as Narrow Banks. And Hands Tokenized Deposits the Academic High Ground

The NY Fed just published something that every bank strategist, stablecoin issuer, and treasury team should read carefully. Staff Report 1179 - authored by Huang and Keister - doesn't pick sides in the stablecoins vs. tokenized deposits debate. It does something more consequential: it builds a formal economic model that shows these two instruments have fundamentally different effects on credit creation, interest rates, and the broader economy.

The paper's subtitle says it all: "The Narrow Banking Debate Revisited." The Fed is connecting stablecoins - fully backed by Treasuries, no lending function - to a monetary architecture argument that dates back to the 1930s Chicago Plan and Friedman's 1960 proposal for narrow banks. Stablecoins, in this framing, aren't fintech innovation. They're the oldest debate in monetary economics running on new rails.

Key Points:

• The NY Fed models stablecoins as narrow bank money - backed 1:1 by safe assets (Treasuries), with issuers unable to lend those reserves. Tokenized deposits, by contrast, are fractional reserve bank money - banks issue them and lend against them, preserving credit intermediation

• The core finding: stablecoins can crowd out bank deposits, reduce bank lending, and lower aggregate investment. At $250B+ in stablecoin supply, that's $250B+ in Treasuries locked up and unavailable for the banking system's lending multiplier. At typical leverage ratios, the credit contraction could run into the trillions

• Tokenized deposits capture the blockchain payment benefits — programmability, 24/7 settlement, global reach — without the credit contraction cost. Banks can still lend, investment doesn't decline.

• The welfare outcome depends on a trade-off: stablecoins may make the payment system safer, but if the credit contraction effect dominates the efficiency gain, they could be welfare-reducing

• This builds on the Fed Board's own December 2025 FEDS Note, which found large banks are better positioned to adapt to stablecoin growth through diversified funding and tokenized deposit products, while smaller banks face meaningful deposit outflow risk

The Tokenized Take:

Regular readers will remember our December 3rd analysis when the FDIC revealed it was building two separate playbooks - one for stablecoins, one for tokenized deposits .

We argued then that these are fundamentally different instruments, not marketing variants of each other. That the GENIUS Act explicitly excludes tokenized deposits for a reason. That FDIC Chair Hill's line - "A deposit is a deposit" - was a policy signal worth billions .

The NY Fed just gave that argument its academic foundation.

But here's what the Fed paper doesn't address, and what matters most for anyone actually building or buying these products:

Distribution determines winners, not theoretical optimality. The Fed model treats stablecoins and deposit tokens as abstract instruments. In the real world, Circle has multi-chain distribution across every major DeFi protocol. Tether has $180 billion + in float (with ~65% backed by treasuries). PayPal has 400 million+ consumer accounts. JPMorgan's Kinexys processes trillions and, as we covered in November, just broke out of its walled garden by taking JPM Coin live on Base (Coinbase's public L2) with counterparties like B2C2 and Mastercard executing on public rails. Whether other banks follow that playbook fast enough to match stablecoin network effects is the $300 billion question the model assumes away.

Interoperability is the actual blocking issue. Our previous analysis flagged that tokenized deposits are closed-loop by design - only usable by customers of that bank - unless banks build interoperability bridges. JPMorgan just built one: JPM Coin on Base can be swapped into USDC via market makers like B2C2, giving institutional clients a path from deposit token to open stablecoin ecosystem. The Fed's model doesn't capture this hybrid architecture. And critically, a tokenized deposit at JPMorgan and one at BNY Mellon still aren't fungible - the inter-bank interoperability problem remains unsolved even as the bank-to-stablecoin bridge goes live.

Geopolitics doesn't fit in a general equilibrium model. Our coverage of Alibaba's partnership with JPMorgan for trade settlement showed exactly why some jurisdictions prefer tokenized deposits: Beijing has so far tolerated bank-issued deposit tokens for cross-border trade because they don't threaten monetary sovereignty. Private stablecoins are a different story entirely.

What the Fed does add is the macro credit argument we hadn't fully explored. When Tether parks $100 billion+ in Treasuries, that's not just reserve management - it's deposits migrating from fractional reserve banks to full-reserve stablecoin issuers, reducing the lending base. Scale that to the $500B+ stablecoin market some project by 2027, and the credit contraction question stops being theoretical.

So the question is: does the payment efficiency gain from stablecoins outweigh the lending capacity they displace? The Fed's model says "it depends." Our market experience says the answer will vary by jurisdiction, by use case, and by who controls distribution.

🚀 Payoneer Taps Bridge (Stripe) for Stablecoin Roll-Out . And Bridge Just Got a Federal Bank Charter

Some of the themes below, especially Bridge's conditional OCC charter and the charter race, are covered in depth in Simon's Market Readout. Below is the commercial story and what it means for cross-border payments specifically.

Key Points:

• Payoneer will embed stablecoin capabilities (i.e., receive, hold, send, and convert) directly into its existing platform, powered by Bridge (Stripe's $1.1B stablecoin infrastructure acquisition). Select-market launch is set for Q2 2026, with broader rollout through the year.

• Payoneer serves nearly 2 million active customers across 190+ countries and territories, processed $80 billion in volume for FY2024, and has a revenue guidance of ~1 billion. These customers are marketplace sellers, freelancers, and SMBs who deal with the exact frictions stablecoins address: FX conversion costs of up to 2–3.5%, weekend settlement gaps, and pre-funding requirements across dozens of local currencies.

• The product is framed entirely around operational value - "always-on, programmable money movement", and not crypto. A goods wholesaler can receive customer payments in stablecoins; a marketing agency can use them to pay international suppliers or contractors. Bridge handles custody, blockchain abstraction, and rails so Payoneer doesn't have to.

• Bridge also disclosed conditional OCC approval for a federally chartered national trust bank this week (see Market Readout for the broader charter landscape) - the regulatory backdrop that makes Payoneer's integration timing strategic rather than coincidental.

The Tokenized Take:

This is the third major cross-border payments company in six months to choose Bridge as its stablecoin infrastructure partner. And as of today, that infrastructure partner is on a path to becoming a federally chartered bank.

Payoneer isn't a crypto company. It's a NASDAQ-listed, ~$2 billion market cap fintech whose core business is helping SMBs and freelancers move money across borders. Marketplace sellers in Southeast Asia. Freelance developers in Eastern Europe. Export businesses in Latin America. These are the customers who absorb the real cost of correspondent banking: 2-3.5% FX markups on every conversion, 1-3-day settlement delays, and capital locked up in pre-funded local currency accounts. For a freelancer in the Philippines receiving $2,000 from a US marketplace, those fees can mean $40-70 lost per transaction. Stablecoin settlement compresses that materially.

The architecture tells you where the market has landed. Payoneer isn't building its own blockchain team - it's plugging into Bridge and letting their infrastructure handle custody, on/off ramps, blockchain abstraction, and compliance tooling. For Payoneer's end user, the experience is seamless: accept payment in stablecoins, hold value without local currency depreciation risk, convert to pesos or naira when ready. Same Payoneer account. No new app. No crypto wallet learning curve.

This is the distribution over issuance thesis we've been building since the Klarna and Cash App pieces. The entities winning stablecoins aren't necessarily the ones minting them - they're the ones with existing customer relationships and embedded payment flows. Klarna launched KlarnaUSD for its 114 million users. Zepz plugged Bridge into Sendwave for Visa cards. Cash App opened stablecoin rails to its 58 million users. Now Payoneer brings nearly 2 million active business accounts into the fold.

Bridge's flywheel is the real story. Bridge now powers stablecoin rails for at least five major platforms - Payoneer, Zepz, Remitly, Remote.com, and Klarna - collectively touching hundreds of millions of users and tens of billions in annual volume. Every new platform integration adds corridors, compliance precedent, and liquidity depth. Each deal makes the next one easier to close - the same network effects that made Stripe dominant in card processing are now compounding in stablecoin infrastructure. Stripe paid $1.1 billion for Bridge. The return on that bet is becoming visible.

The conditional OCC charter adds a regulatory layer to all of this. As covered in the Market Readout, Bridge is now on a path to federal supervision alongside BNY, Northern Trust, and State Street's trust operations. For Payoneer, and for every platform plugged into Bridge,  this collapses the single biggest enterprise objection: "Who's the counterparty, and who regulates them?" The answer, once the charter is finalized: a federally supervised institution operating under OCC examination.

So, who's left? Airwallex is building a stablecoin team internally, but is publicly positioning stablecoins as "not yet ready at scale". Wise has started hiring a digital assets product lead focused on stablecoins but hasn't shipped a product. The remaining major cross-border platforms are watching their competitors integrate stablecoin rails while they're still scoping. If you're running treasury at one of those companies, this Payoneer announcement should be moving stablecoin integration from "innovation roadmap" to "competitive necessity."

The window to be early is closed. The window to be on time is still open.

🚀 Starknet Adds EY Nightfall to Enable Private Institutional Payments on Public Ethereum Rails

Ask any corporate treasurer why they won't move serious volumes onto public blockchains and you'll hear the same answer: everyone can see everything. Balances, counterparties, payment timing - all visible, all exploitable. That transparency remains the single biggest blocker keeping banks and large corporates off public rails.

StarkWare is trying to close that gap. The company announced it's integrating EY's Nightfall - an open-source zero-knowledge privacy layer - directly into its Starknet Layer 2 network. The pitch: institutions can now make private payments, run confidential treasury operations, and participate in DeFi on public Ethereum rails without exposing their books to the world.

Key Points:

• ZK-powered selective disclosure. Nightfall uses zero-knowledge proofs to shield transaction details - amounts, counterparties, and balances stay hidden onchain while allowing selective disclosure to regulators and auditors on demand. That's the compliance/privacy trade-off institutional buyers have been asking for.

• Squarely institutional use cases. Target applications include private cross-border payments, confidential treasury management, and participation in DeFi lending and swaps - areas where exposed positions create genuine competitive risk and compliance exposure.

• Named executive framing. EY's Paul Brody called privacy "the missing ingredient for large-scale enterprise payments on-chain," adding that public, shared blockchains built on open standards are the only scalable path. StarkWare CEO Eli Ben-Sasson (a founding scientist behind Zcash) positioned this as "the equivalent of a private superhighway for stablecoins and tokenized deposits."

• Multi-chain expansion underway. EY first open-sourced Nightfall in 2019. In April 2025, Nightfall was upgraded from an optimistic rollup to a ZK validity proof architecture, eliminating challenge periods entirely. Transactions are now final as soon as a block is added to the chain. Celo deployed it as a payments-focused L3 in late 2025; Starknet becomes the second major deployment, with the critical architectural difference that Nightfall-powered transactions are designed to enable  interaction with Ethereum DeFi while maintaining privacy.

• No production timeline committed. StarkWare said it would support adoption through institutional events and developer education but did not commit to a general availability date.

The Tokenized Take:

The industry has been working through this tension for years: public blockchains offer composability, liquidity, and 24/7 settlement - exactly what institutional finance needs. But that same transparency makes them unusable for any entity that can't afford to broadcast its financial strategy to the world. A corporate treasurer isn't going to move $200 million in working capital through a system where competitors can front-run the flow.

Private and permissioned chains solve the privacy problem but create fragmentation. JPMorgan's Kinexys, R3 Corda, and similar networks keep transactions confidential, but they're walled gardens - no access to Ethereum's DeFi liquidity, no composability, and ultimately the same siloed infrastructure blockchain was supposed to replace.

The privacy architecture consensus is forming. As our host Cuy Sheffield (Visa) noted on a recent episode of the Tokenized podcast, institutions and enterprises are worried more about privacy than scalability. And Haun Ventures' Diogo Mónica argued the optimal design is not to build privacy at the L1 level, it’s rather left for higher layers. Nightfall on Starknet is exactly that: a privacy layer at L2 that preserves the composability of the underlying public chain while adding regulator-inspectable controls. Meanwhile, LayerZero's "Zero" chain - backed by Citadel, DTCC, and ICE - takes a different approach with zone-based isolation. Both architectures confirm the same institutional demand signal: privacy isn't optional, it's prerequisite.

The EY branding matters more than the cryptography here, frankly. Most enterprise blockchain decisions aren't made by CTOs alone - they're made by risk committees, compliance officers, and boards. When privacy infrastructure comes stamped with a Big Four firm's name, it clears procurement and due diligence hurdles that pure crypto-native solutions struggle with. StarkWare's Alex Gruell acknowledged this directly, noting that EY adds "a complementary layer of institutional credibility and regulatory fluency."

But there are execution risks.  Starknet suffered multiple outages in 2025 tied to sequencer and infrastructure issues. Institutions don't tolerate downtime. If your payment rail goes offline for hours, that's an operational crisis, not a technical hiccup.

Overall, the reality check is: this is still early infrastructure. No production launch date, no named institutional partners transacting live, no volume metrics. The architecture is sound, the thesis is right, and the demand from enterprise treasury teams is real. But we're watching the foundation being built, not the building going up.

📰 Some More News:

🏦 Tokenization, Stablecoins & Finance

• Elemental Royalty becomes the first public gold company to pay dividends in Tether's tokenized gold (XAUT), with the $2.5B product gaining a novel Wall Street use case. (Read more here)

• Quantoz Payments becomes a Visa principal member, enabling stablecoin-linked debit cards across Europe backed by its USDQ, EURQ and EURD e-money tokens. (Read more here)

• Wintermute launches institutional tokenized gold trading, projecting the market will reach $15 billion in 2026 as the sector surges 80% in three months to $5.4B. (Read more here)

• Ethereum's tokenized RWA market tops $17 billion — up 315% year-over-year — as major TradFi institutions continue moving on-chain. (Read more here)

• BVNK/YouGov global survey finds 39% of crypto users receive income in stablecoins and 27% use them for daily payments across 15 countries. (Read more here)

• BlackRock begins seeding its Ethereum staking ETF, with an affiliate purchasing initial shares to fund the trust's first ETH purchases. (Read more here)

• TON Foundation partners with OSL's Banxa to expand stablecoin payment infrastructure for Asia-Pacific merchants. (Read more here)

• Lloyds Banking Group's Head of Digital and Market Innovation outlines the Great British Tokenised Deposit initiative and the UK's strategy for tokenized money on public infrastructure. (Read more here)

• Kraken becomes the first crypto exchange integrated with ICE Chat, placing its OTC desk alongside traditional asset classes for 120,000+ institutional market participants. (Read more here)

• Abu Dhabi's Mubadala and Al Warda held over $1 billion in BlackRock's Bitcoin ETF at end of Q4 2025, confirming sovereign wealth fund participation at scale. (Read more here)

🤑 Funding and M&A

• Dragonfly Capital closes a $650M Fund IV focused on DeFi, stablecoins, RWAs, and traditional financial products built on blockchain rails — one of the largest crypto VC raises amid a bear market. (Read more here)

• SBI Holdings signs a letter of intent to take a majority stake in Singapore-based crypto exchange Coinhako, deepening Japan's largest financial group into Southeast Asian crypto infrastructure. (Read more here)

• Analysts at Compass Point and Canaccord name BitGo a potential acquisition target for Wall Street firms, citing its institutional custody and prime brokerage crossover potential. (Read more here)

• Gemini shares plunge 14%+ as COO, CFO, and Chief Legal Officer all exit simultaneously — months after its IPO and amid a 25% global headcount reduction. (Read more here)

• Monad Foundation hires three senior executives from FalconX, BVNK, and Optimism — all with JPMorgan and Deutsche Bank backgrounds — to drive institutional adoption post-mainnet. (Read more here)

• David Bailey's Nakamoto acquires BTC Inc. and UTXO Management in a vertical consolidation of Bitcoin media and treasury infrastructure. (Read more here)

• eToro shares surge 20%+ on stronger-than-expected Q4 earnings, with diversified asset mix buffering softer crypto revenues — January 2026 crypto trades down 50% YoY. (Read more here)

• Philippine digital bank Maya explores a US IPO of up to $1 billion, combining regulated banking with an in-app crypto trading arm and targeting deeper institutional investor access. (Read more here)

💼 Government & Policy

• BVNK secures a MiCA CASP licence from Malta's Financial Services Authority, adding regulated EU market access to its stablecoin infrastructure stack. (Read more here)

• Germany's Bundesbank President Joachim Nagel publicly endorses euro-denominated stablecoins and a wholesale CBDC, framing both as tools for European payments independence. (Read more here)

• The European Commission reportedly seeks an EU-wide ban on all crypto transactions with Russian entities, as the A7A5 stablecoin alone processed $70 billion in volume in 2025. (Read more here)

• Poland's president vetoes a second MiCA implementation bill — nearly identical to one rejected in December — leaving the country without a designated crypto supervisor ahead of the July 1, 2026 deadline. (Read more here)

• Trump signals the crypto market structure bill (Clarity Act) will pass soon, while Treasury Secretary Bessent says passage would meaningfully stabilize market sentiment. (Read more here)

• Trump filling Democratic vacancies at the SEC and CFTC could accelerate bipartisan crypto bill talks, according to TD Cowen analysts. (Read more here)

• Coin Center urges the Senate Banking Committee to advance the Blockchain Regulatory Certainty Act, which would shield software developers and infrastructure providers from money transmitter liability. (Read more here)

• Animoca Brands receives a VARA licence in Dubai for broker-dealer and asset management services, as the emirate simultaneously tightens its stablecoin definitions and restricts privacy tokens. (Read more here)

• Hong Kong's SFC adds Victory Fintech to its approved trading platform list — the first approval since June 2025 — as enforcement against unlicensed platforms continues. (Read more here)

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