Coinbase’s payments platform for merchants will no longer support Bitcoin and other UTXO coins unless customers have an existing account with the exchange.
Coinbase Commerce will no longer support Bitcoin and similar UTXO coins unless customers have an existing Coinbase account.
Shutterstock
Posted February 19, 2024 at 1:23 am EST.
Coinbase Commerce, a payment gateway from crypto exchange Coinbase that lets merchants accept crypto from customers, will end support for Bitcoin and similar UTXO coins amid a series of changes to the product.
In an X thread on Feb. 18, Lauren Dowling, the firm’s head of product, explained that the new Coinbase Commerce product would enforce the details of each payment on-chain, and support hundreds of cryptocurrencies across Base, Polygon and Ethereum, while automatically converting payments to USDC at a guaranteed rate for merchants.
“Delivering these same capabilities on the Bitcoin blockchain without smart contracts and stablecoins was challenging & we therefore made the difficult decision to remove native Bitcoin & other UTXO support,” said Dowling on X.
8/ Since making the change, the results have brought us much closer to executing on our mission – seeing higher conversion rates, less manual effort, and glowing feedback from many merchants. 💬
— Lauren Dowling (@Lauren_Dowling_) February 17, 2024
She emphasized that customers would still be able to pay with Bitcoin and other UTXO assets if they had an account with Coinbase.com, which would also support payments for the tokens that were on networks that were not yet supported by the payments protocol.
The news was met with mixed criticism from some users, who questioned the requirement for having a Coinbase account just to make payments.
“That’s like dictating that every customer has to be a Bank of America customer in order for merchants who simply bank with BofA to accept payments,” said one user on X.
Coinbase is often acting as if they are fighting the good fight, but don’t be fooled, they aren’t.
Example, ‘Coinbase Commerce’ no longer supports payments from self-custody wallets or third party exchanges:
‘You can still accept Bitcoin, […] payments as long as your… pic.twitter.com/vgyTO7MLLq
— CR1337 (@cryptonator1337) February 18, 2024
Coinbase CEO Brian Armstrong clarified that the new Ethereum Virtual Machine (EVM) payment protocol would still support payments from any self-custody wallet, and the changes were implanted around the belief that Layer 2 networks would drive the majority of crypto payments.
“Zooming out – we think paying for stuff online with crypto won’t really go mainstream until we get off layer 1, and reduce transaction fees and confirmation times, so we’re trying to accelerate the move toward that world,” said Armstrong.
“Hopefully it makes more sense through that lens. It may not be what everyone wants, but this is our current approach that we hope will serve the largest number of customers.”
I think when you say “You can pay from any self-custody wallet”, this is a misleading statement.
You should accept payments from external lightning and on-chain wallets to say this.
— Stephan Livera (@stephanlivera) February 18, 2024
Last week, Coinbase reported fourth quarter earnings ahead of street estimates, with revenue of $953.8 million, largely driven by an 83% surge in transaction revenue from the previous quarter.
