FILE PHOTO: FILE PHOTO: Illumination of the stock graph is seen on the representations of virtual currency Bitcoin in this picture illustration taken taken March 13, 2020. REUTERS/Dado Ruvic/File Photo
NEW YORK (Reuters) - Fireblocks, an infrastructure provider for cryptocurrencies, has acquired First Digital, a stablecoin and digital asset payments technology platform.
Fireblocks and First Digital said on Wednesday they had reached a cash and equity deal, without disclosing financial details, but two sources close to the deal said the purchase price was $100 million.
Fireblocks last month raised $550 million from institutional investors, pushing its valuation to $8 billion.
The First Digital acquisition will expand Fireblocks' existing payment capabilities allowing payment service providers (PSPs) to accept crypto payments.
PSPs and large merchants are eager to meet customer demand for crypto and digital currency payments, but offering these services often entails challenges such as high wallet integration costs and manual anti-money laundering screening.
Fireblocks said the addition of First Digital will enhance solutions it already offers to address those issues.
"What First Digital brings is an awesome product and extensive leadership and know-how in the payments domain," Fireblocks Chief Executive Michael Shaulov told Reuters in a telephone interview. "Specifically the product they're bringing to the market, I think is very applicable to the mass market."
First Digital will also launch a business unit within Fireblocks that is "purely focused on payments and enabling our customers to accept and remit using several kinds of cryptocurrencies," Shaulov said.
First Digital's payment capabilities include stablecoins, cryptocurrencies pegged to a fiat currency like the U.S. dollar.
First Digital Chief Executive Ran Goldi said the deal was a natural fit, given the companies had been partners for two years. He added that over the past six months First Digital "saw lot of interest from companies that three years ago said we were ahead of our time."
Through First Digital, merchants who work with supported payments service providers can simply add an option to accept crypto payments, and the funds are settled in either local currency or crypto.
All First Digital employees will be absorbed by Fireblocks under the deal.
(Reporting by Gertrude Chavez-Dreyfuss; editing by Jane Wardell)
