Polygon Labs Acquires Coinme and Sequence
In a strategic move to transition into a fully regulated payments entity, Polygon Labs announced its $250 million acquisition of Coinme, a prominent payments platform, alongside Sequence, an infrastructure-focused firm. The news was released on Tuesday, highlighting Polygon’s ambition to enhance its toolkit dedicated to facilitating the management and transfer of digital assets for various businesses.
Vision for the Future
Marc Boiron, CEO of Polygon Labs, articulated the company’s vision in a discussion with Decrypt, emphasizing the importance of offering a robust solution for a future where stablecoins and tokenized securities play a pivotal role in economic transactions.
“While we are acquiring two crypto entities, the main objective is to create a regulated middleware system,”
Boiron explained. He elaborated on the simplicity of their approach: a single API integration that provides everything a business needs to interact with blockchain technologies, including wallet functions and cross-chain payment capabilities.
About Coinme and Sequence
Founded in 2014, Coinme operates as a registered money services business under the Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury, facilitating cash-to-crypto transactions at over 50,000 locations nationwide, including major retailers such as Walmart. Boiron expressed particular interest in Coinme’s service, which enables customers to exchange cash for cryptocurrency through retail cashier interactions, referring to it as a “Trojan horse” for easing consumers into the crypto space.
“You can simply visit a grocery store, have the barcode scanned, pay cash, and receive crypto,”
he noted.
On the other hand, the acquisition of Sequence, a company previously known as Horizon Blockchain Games, is expected to enhance Polygon’s ability in managing complex transactions across different blockchains. Sequence has notably developed enterprise-level smart wallets and a payment routing technology aimed at resolving issues of interoperability in the crypto realm.
Strategic Shift and Revenue Generation
Polygon Labs’ acquisitions come after a significant $450 million funding round led by Sequoia Capital India in 2022, marking a significant shift in the company’s strategy towards revenue generation. Boiron pointed out that while the firm previously aimed at boosting the value of its native token POL (previously MATIC), it now seeks income from transaction fees charged by Coinme, capitalizing on swaps and crypto on-ramping. Coinstar, in partnership with Coinme, imposes a service fee as high as 12.9% along with a standard transaction fee of $0.99. Though distinct, Coinstar and Coinme cooperate within the Bitcoin ATM market.
Boiron remarked that tapping into revenue-generating ventures like these will enhance the throughput on Polygon’s blockchain, which, in turn, benefits POL stakers. Currently, POL is trading around $0.15—a significant decline of 66% from its previous year, falling from a March 2024 peak of $1.29 following its rebranding.
Open Money Stack Initiative
Recently, Polygon introduced the Open Money Stack, a versatile toolkit aimed at integrating seamlessly into existing financial services. This initiative facilitates a range of applications in payments, lending, and remittances, with added advantages including yield generation and foreign exchange capabilities. The toolkit also boasts features for on-chain identity management and stablecoin compatibility, providing essential functions for developers.
Future Engagement Strategies
During the height of the pandemic-driven crypto boom, Polygon established itself as a leading provider for applications catered to consumers, supporting partnerships with businesses like Starbucks, Reddit, and DraftKings, most of which have since pulled back from direct crypto integrations.
As Polygon Labs finalizes its acquisition of Sequence later this month and Coinme in the latter half of the year, Boiron insists on a transformative approach.
“Rather than relying on external parties to draw users to our network, we are now investing in creating physical touchpoints to engage end users directly,”
he remarked, positioning Polygon as an optimal platform for payment solutions in the evolving digital market.
