Coinbase decided to drop support for native bitcoin payments from its merchant platform, Coinbase Commerce.
The change also affects other unspent transaction output (UTXO) coins, requiring shoppers to have a Coinbase account to use bitcoin for payments, Cointelegraph reported Sunday (Feb. 18).
The decision was communicated by Coinbase Head of Product Lauren Dowling, who cited challenges in updating the platform for bitcoin’s EVM payment protocol, per the report.
“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,” Dowling said in a Saturday (Feb. 17) post on X, formerly known as Twitter.
6/ 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.
— Lauren Dowling (@Lauren_Dowling_) February 17, 2024
Despite the change, shoppers with a Coinbase account can still use bitcoin through the platform, according to the report. CEO Brian Armstrong mentioned plans to integrate the Lightning Network into Coinbase, opening possibilities for future commerce payments.
“As a fallback, customers can pay with a Coinbase account if they have one,” Armstrong said in a Saturday post on Twitter. “And yes that includes paying with bitcoin directly if you want (Coinbase to Coinbase transactions happen off-chain so we can make this instant and free).”
This isn’t quite right, so let me share some more context in case helpful:
– Commerce uses a new EVM payment protocol.
– You can pay from any self-custody wallet
– We believe paying with crypto is going to primarily happen on Layer 2 in the future and we want to help make that…— Brian Armstrong ?️ (@brian_armstrong) February 17, 2024
Bitcoin transactions rely on the UTXO model, designed for transparency and security, according to the report.
The move to remove native bitcoin support has stirred community criticism, the report said.
In one comment cited in the report, a user said in a post on X: “Is it assumed every customer is in the U.S. and able to open a Coinbase account and/or that every customer would want a Coinbase account? 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.”
is it assumed every customer is in the US and able to open a Coinbase account and/or that every customer would want a Coinbase account? 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…
— ru (@rude_fi) February 18, 2024
Coinbase Commerce is one of a handful of early crypto believers that have offered merchants the ability to accept payments in bitcoin and a few other cryptocurrencies for years, PYMNTS reported in February 2022.
It has offered merchants an API, focusing on ease of use with tools including invoicing, hosted checkout, payment buttons and eCommerce options.
Thirty percent of consumers hold cryptocurrency, according to the PYMNTS Intelligence report “Are Credit Unions Ready to Offer Cryptocurrencies?”
For all PYMNTS crypto coverage, subscribe to the daily Crypto Newsletter.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More