TL;DR
- Coinbase withdraws support for Bitcoin and other UTXO cryptocurrencies from its Commerce service, sparking debates in the community.
- The decision is based on integration challenges in BTC’s EVM payment protocol due to the lack of smart contracts and stablecoins in its blockchain.
- Despite the measure, it will continue to offer a variety of assets and automatically convert payments to USDC to provide stability.
Coinbase, one of the leading cryptocurrency exchange platforms, has made the decision to withdraw support for Bitcoin and other UTXO-based cryptocurrencies from its payment service for merchants, Coinbase Commerce. This decision has sparked debate within the community and raised questions about its impact on Bitcoin adoption and the user experience of the exchange.
The reason behind this decision lies in the challenges Coinbase faced in integrating recent updates into its Ethereum Virtual Machine (EVM) payment protocol for Bitcoin. According to Lauren Dowling, head of product, the lack of smart contracts and stablecoins in the Bitcoin blockchain posed significant obstacles to integration into the exchange’s payment protocol. As a result, the platform chose to withdraw support for Bitcoin and other UTXO-based cryptocurrencies.
1/ Hey folks, I’m the product lead for Coinbase Commerce and want to share some thoughts on how the product is evolving, why we’ve made these changes, and clarify what it means for our asset support strategy moving forward. 👇
— Lauren Dowling (@Lauren_Dowling_) February 17, 2024
Despite this decision, Coinbase Commerce will continue to offer a wide range of assets and allow merchants to detail each payment on the blockchain. Additionally, payments will be automatically converted to USDC, a stablecoin, at a guaranteed rate for merchants, providing them with stability in their transactions.
Controversy Over Coinbase’s Decision: Not All of its Users Are in the United States
Coinbase CEO Brian Armstrong highlighted that Bitcoin users will still be able to use the platform if they have an account with the exchange. Additionally, he mentioned the ongoing integration of the Lightning Network into Coinbase, a solution aimed at facilitating faster and more cost-effective transactions on the Bitcoin blockchain. Armstrong also emphasized the importance of moving away from the base layer of the blockchain to reduce transaction fees and confirmation times, which he believes is crucial for the widespread adoption of cryptocurrency payments online.
However, the exchange’s decision has sparked criticism within the crypto community. Some argue that it assumes that all customers are in the United States and are willing or able to open an account with Coinbase, which could limit the adoption of BTC and negatively affect traders and users in other jurisdictions.
