Crypto giant Ripple to acquire stablecoin payments platform Rail for $275 million CAD

San Francisco-based crypto company Ripple has acquired Toronto-based stablecoin payments infrastructure startup Rail for $200 million USD ($275 million CAD) in a mix of cash and equity.

Founded as Layer2 Financial in 2021 by CEO Bhanu Kohli and CTO Tarun Mistry, Rail initially developed financial infrastructure for digital assets before pivoting to support global money movement for both standard currencies and stablecoins. Ripple said the deal will add Rail’s virtual accounts and automated back-office infrastructure to its capabilities.

Virtual accounts lower barriers to entry by letting customers transact with digital assets without the need to open dedicated crypto accounts or wallets on a centralized exchange, according to Ripple.

Rail claims it’s on track to process over 10 percent of the $36-billion global business-to-business stablecoin payments made this year.

“We are uniquely positioned to drive the next phase of innovation and adoption of stablecoins and blockchain in global payments,” Ripple president Monica Long said in a statement.

As Layer2, Rail raised a $10.7-million Series A funding round led by Galaxy Ventures in July 2024 to develop its product, expand its market, and acquire talent. At the time, the company claimed it was seeing a consistent 20-percent increase in month-over-month transaction processing volumes.

Rail rebranded from Layer2 this past October to “fully reflect” its focus on instant international payments. Kohli claimed in a statement that Rail is on track to process over 10 percent of the $36 billion in global business-to-business stablecoin payments made this year.

Stablecoins are cryptocurrencies with prices that are intended to be less volatile because they are pegged to a “stable” asset like the United States (US) dollar, but can run the risk of “depegging”—deviating from the value of their stabilizing asset. Blockchain data platform Chainalysis estimates that 63 percent of the world’s $40.9 billion in illicit crypto activity is conducted with stablecoins.

Crypto has had a resurgence under American president Donald Trump, and the rally continued for stablecoins when he signed the GENIUS Act into law last month. The measure requires stablecoins to be backed by liquid assets.

In 2020, the US Securities and Exchange Commission (SEC) sued Ripple for an unregistered digital asset securities offering of the XRP cryptocurrency. This past March, the SEC under Trump said it would drop the lawsuit and effectively gave Ripple the opportunity to make more strategic moves in the space.

The tailwinds created by the Trump administration have inspired movement in the sector. For its part, in December Ripple launched its own stablecoin, RLUSD, which is pegged to the US Dollar. When Ripple spent $1.25 billion to acquire multi-asset prime broker Hidden Road in April to help lend institutional credibility to RLUSD, Ripple CEO Brad Garlinghouse said in a statement that “the US market is effectively open for the first time” as the Biden-era SEC policies came to an end.

While the SEC backs away from defining cryptocurrency as a security, Canada still strictly regulates the cryptocurrencies allowed to trade on exchanges. In response to the action taking place south of the border, industry figures like former BlackBerry co-CEO Jim Balsillie and Coinbase Canada CEO Lucas Matheson have called on Canada to expedite the introduction of stablecoins.

“Without real action, Canada will depend on foreign stablecoin infrastructure rather than building a strong domestic ecosystem,” Matheson wrote in an op-ed for BetaKit. “Canadians will increasingly turn to US-denominated stablecoins, eroding the Canadian dollar’s relevance in everyday transactions.”

In recent months, Canadian e-commerce giant Shopify has rolled out support for the USDC stablecoin in its platform, and international crypto exchange Coinbase invested in Toronto-based Stablecorp to build out its stablecoin pegged to the Canadian dollar.

Ripple has been actively expanding through mergers and acquisitions, having spent more than $3 billion on such opportunities to date. The Rail acquisition is expected to close in the fourth quarter of 2025.

Feature image courtesy Rail.