Stripe is considering an acquisition of all or parts of PayPal. Bloomberg reported on early, exploratory talks between the two payment processors. No formal offer has been made. John Collison, Stripe's co-founder, said only that he could "not comment on M&A hypotheses."
The numbers illustrate the size difference. Stripe carries a valuation of $159 billion, based on an employee tender offer in February 2026. PayPal's market capitalization stands at $43 billion, a factor of 3.7x. Its stock rose 7 percent following the Bloomberg report but is down roughly 19 percent year-to-date in 2026. Since its 2021 peak, the stock has lost about 80 percent of its value.
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Complementary stablecoin strategies
Both companies pursue different approaches in the stablecoin market. Stripe focuses on B2B infrastructure. Bridge, acquired in 2024 for $1.1 billion, received a conditional OCC approval for a national bank trust charter on February 17, 2026. With full approval, Bridge would be authorized to custody digital assets, issue stablecoins, and operate reserves. At the same time, Bridge won the contract to issue the USDH stablecoin on the DeFi platform Hyperliquid, beating out Paxos.
PayPal, by contrast, targets the consumer segment. Its in-house PYUSD stablecoin, launched in 2022 through Paxos, is natively available on four blockchains: Arbitrum, Ethereum, Solana, and Stellar. Through an investment in the Stable Layer-1 blockchain and its LayerZero bridging technology, PYUSD now reaches a total of eleven networks. In April 2025, the SEC concluded its investigation into PYUSD without enforcement action.
A merger would therefore connect B2B infrastructure with a consumer ecosystem. Together, the combined group would control substantial portions of crypto payment rails, from stablecoin issuance and custody to checkout.
Regulatory tailwind after the GENIUS Act
This acquisition push comes during a phase of accelerating regulatory openness. Signed in July 2025, the GENIUS Act established clear standards for stablecoin issuance and trading for the first time. Stripe's founders described the development as "Stablecoin Summer." Already in May 2025, the OCC permitted banks to hold crypto assets.
Since then, payment and financial companies have been pushing into the market. Beyond Bridge, five additional digital asset firms received conditional OCC approvals in December 2025: Circle, Ripple, Paxos, Fidelity Digital Assets, and BitGo. Coinbase and World Liberty Financial also filed applications. Still, the American Bankers Association and the Independent Community Bankers of America raised concerns about these approvals for crypto firms.
"Stablecoins are becoming core financial infrastructure. Institutions need regulatory clarity, operational resilience, and scalable systems to build with confidence." - Bridge (Stripe subsidiary)
The total stablecoin market surpassed the $300 billion mark in 2025 and currently sits at around $308 billion. Tether and Circle together control over 94 percent of the market. Forecasts nonetheless project a market capitalization of $2 trillion by the end of 2026.
Vertical integration as strategic calculus
Strategically, the deal makes clear sense for Stripe. In 2025, the company processed $1.9 trillion in payment volume and is systematically expanding its crypto infrastructure. Beyond Bridge, Stripe is developing the payments-focused blockchain Tempo together with venture firm Paradigm, which is currently in its testing phase. Payoneer also announced a partnership with Bridge to launch stablecoin offerings in select markets by mid-2026.
And PayPal offers valuable assets despite its stock decline. Beyond PYUSD and the global checkout network, its enterprise clients and established payment corridors stand out. Visa already partnered with BVNK to enable PYUSD payouts via Visa Direct. This reduces fees on remittance corridors from roughly 6 percent to below 2 percent. Fiserv is launching FIUSD, its own stablecoin with interoperability to PYUSD.
Competition for blockchain infrastructure intensifies
The potential merger comes amid a broader infrastructure competition among payment giants. Circle is developing the Arc Blockchain, Ripple operates the XRP Ledger with the RLUSD stablecoin. Stripe is building Tempo, PayPal is investing in the Stable Layer-1. Primary use cases for 2026 center on cross-border B2B payments, treasury optimization, currency conversion, and settlement between financial institutions.
PayPal, meanwhile, faces mounting pressure. Competitors like Apple and Alphabet have significantly expanded their payment offerings. Recent quarterly results missed analyst expectations on both earnings and revenue. Stripe, by contrast, shows accelerating growth through enterprise clients, stablecoin activity, and AI-powered commerce tools. At a $159 billion valuation, acquiring the significantly smaller rival is financially feasible.
What remains open is whether Stripe wants to acquire all of PayPal or only certain business units. Bloomberg mentioned both scenarios. At this scale, intensive antitrust reviews by US authorities would be expected. Whether a transaction actually materializes is therefore not certain. These talks remain in an early phase.
