Ripple Labs Inc. today announced plans to acquire Rail, a Canadian startup that uses stablecoins to expedite international payments.

The deal is worth $200 million, or nearly 20 times the amount of funding that Rail has raised from investors. Ripple expects to complete the transaction by year’s end.

San Francisco-based Ripple is the creator of XRP, one of the world’s most popular cryptocurrencies. The company owns more than half of the available XRP supply but doesn’t control the blockchain that powers the coin. Ripple counts Alphabet Inc.’s GV startup fund and several major banks among its investors.

Rail, officially Layer2 Financial Inc., provides a platform for making cross-border payments. The company says that its software can complete transactions in hours instead of the days usually required. It achieves the speedup by converting customer funds into stablecoins using major cryptocurrency exchanges.

Ripple also relies on a network of partner banks to process customers’ transactions. When a user makes a payment, the company’s platform determines which bank can process the transaction most quickly and at the lowest cost. It also creates backup payment routes that can be activated in the event of a technical issue.

Rail’s platform is accessible through a dashboard and an application programming interface. Companies such as financial technology startups use it to embed stablecoin payment features into their services. On occasion of today’s acquisition, Ripple detailed that Rail processes more than 10% of the world’s business-to-business stablecoin transactions.

Ripple offers its own stablecoin payment platform. Similarly to Rail’s service, one of its main selling points is that users can quickly complete cross-border translations. Ripple also offers a stablecoin called RLUSD that is pegged to the U.S. dollar.

Rounding out the company’s product portfolio is a service called Ripple Custody. It provides an encrypted environment that organizations can use to store their digital assets. Ripple Custody makes it possible to store encryption keys in hardware security modules, specialized on-premises appliances designed to block tempering attempts. 

The announcement of the Rail acquisition today coincided with the news that the U.S. Securities and Exchange Commission has ended a lawsuit that it launched against Ripple in 2023. Officials accused the company of selling XRP tokens to institutional investors in breach of U.S. securities laws.

The Rail deal marks Ripple’s second acquisition since the start of the year. In April, it agreed to buy prime broker Hidden Road for $1.25 billion. Primer brokers help institutional investors such as banks make investments by providing them with loans and other resources.

Ripple said today it intends to continue making acquisitions going forward. The company has spent more than $3 billion on such deals to date. 

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