Polygon Labs Bolsters Stablecoin Payments Push, Acquiring Coinme and Sequence
TL;DR
Polygon Labs acquires Coinme and Sequence for $250M to become a regulated payments company. The move aims to simplify digital asset management and boost stablecoin adoption through physical cash on-ramps and enterprise smart wallets.
Key Takeaways
- •Polygon Labs is acquiring payments platform Coinme and infrastructure firm Sequence for $250 million to transform into a regulated payments company.
- •The acquisitions will power Polygon's new Open Money Stack toolkit, designed to simplify digital asset management and enable stablecoin payments.
- •Coinme provides a physical cash-to-crypto on-ramp through 50,000 U.S. locations, while Sequence develops enterprise smart wallets and cross-chain payment routing technology.
- •Polygon aims to generate revenue through transaction fees from these services, which could drive more volume to its POL token and benefit stakers.
- •The company is shifting from relying on third parties to building direct end-user relationships through these acquisitions.
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Polygon Labs signaled on Tuesday that it’s becoming a regulated payments company by acquiring Coinme, a payments platform, and Sequence, an infrastructure firm, for a combined $250 million.
Polygon Labs, which established an Ethereum scaling network years ago, said in a press release shared with Decrypt that the acquisitions will help power its new toolkit, which seeks to simplify the process of maintaining and moving digital assets for various firms.
In an interview with Decrypt, Polygon Labs CEO Marc Boiron said the company is determined to provide businesses with a comprehensive solution for an economy that will increasingly revolve around stablecoins and tokenized securities in the years to come.
“We’re buying two crypto companies, but it’s really more about building regulated middleware,” he said. “We give one API, you plug it in, and now you have a blockchain that you can on-ramp and off-ramp to, with wallets, and you can receive funds from any other chain.”
Coinme, founded in 2014, is registered as a money services business with the U.S. Treasury Department's Financial Crimes Enforcement Network, or FinCEN. The company powers more than 6,000 of Coinstar’s kiosks, which let customers exchange cash for digital assets.
Boiron said Polygon was especially interested in Coinme’s “physical cash to crypto on-ramp,” which allows people to purchase crypto using cash at 50,000 locations across the U.S., through interactions with cashiers at convenience stores and retailers like Walmart.
“We view this as a Trojan horse,” Boiron added, arguing the service serves as one of the easiest ways to onboard someone to crypto. “You can go to a grocery store, have the barcode scanned by a cashier, give them cash, and then you have the crypto.”
In the press release, Polygon highlighted Sequence as a developer of “enterprise smart wallets,” as well as technology for routing payments across different blockchains. In November, the company, previously Horizon Blockchain Games, unveiled a “transaction coordination platform” designed to tackle interoperability issues in crypto.
After raising $450 million in a 2022 funding round led by Sequoia Capital India, Boiron said Polygon Labs’ acquisitions represent another major shift: generating revenue.
Historically, the company has been focused on driving “value” to Polygon’s native token POL (formerly MATIC), which is used to pay for transactions fees, Boiron said. The token can also be staked to earn rewards in the form of additional POL tokens.
Moving forward, Boiron said that Polygon hopes to generate revenue through “basis points” that Coinme charges on transactions, including swaps and on-ramping onto crypto.
Through its kiosks, Coinstar charges a service fee of up to 12.9%, in addition to $0.99 per transaction. To be sure, Coinstar and Coinme are separate, independent companies that operate as partners in the Bitcoin ATM space.
“One thing that we realized is that it's actually revenue generating businesses that give us an opportunity to drive even more volume on the chain,” Boiron said, referring to Polygon. “With this on-chain business, we’re actually able to drive even more revenue to POL stakers.”
As of Monday, POL changed hands around $0.15, according to CoinGecko. Over the past year, the token’s price had fallen 66%. POL set an all-time high of $1.29 in March 2024, just a few months after relaunching following the rebrand from MATIC.
Last week, Polygon introduced the Open Money Stack, an all-in-one toolkit that can be integrated into existing financial applications. The system is designed to be able to let anyone move money anywhere, with an emphasis on interoperability and user experience.
In a blog post, Polygon highlighted the Open Money Stack’s ability to support applications focused on payments, lending, and remittances. It noted that the toolkit supports several financial services, including yield generation, swaps, and foreign exchange.
Polygon underscored other elements of the Open Money Stack—including on-chain identities and stablecoin interoperability—as features aimed at developers. What’s more, the toolkit allows for recovery credentials for digital wallets that users lose access to.
During the pandemic-era crypto boom, Polygon became synonymous with consumer applications, underpinning crypto integrations from Starbucks, Reddit, and DraftKings. All of those companies have since moved on, with crypto-related features shuttered.
Polygon Labs’ acquisition of Sequence is expected to close later this month, while its acquisition of Coinme is expected to close in the second half of this year.
Polygon may have relied on other businesses to bring people to its network before, but Boiron said that’s changing, with an investment toward touchpoints to the physical world.
“Polygon might be the best place for payments, but that’s still something where you're relying on another party to do it,” he said. “Building on top of Polygon, it allows us to have those end-user relationships and continue to bring people there.”