The popular cryptocurrency exchange Coinbase has introduced a new open-source Onchain Payment Protocol to improve its Commerce product for merchants.
The San Francisco-based exchange revealed the new protocol on Thursday, presenting it as a solution to enable “instant settlement, low fees, and broad asset support” for merchants using its services. Coinbase Commerce, initially launched in 2018, allows merchants to accept cryptocurrency payments. The company reports that since its launch, thousands of merchants globally have processed billions of dollars in on-chain payments.
Nevertheless, the volatility of cryptocurrencies and complex user experiences have impeded broader adoption. Therefore, Coinbase’s new open-source protocol aims to address these issues by automatically converting customers’ cryptocurrency payments into the popular stablecoin USDC, effectively mitigating exposure to volatility. Currently, the protocol supports Ethereum, Polygon, and the Coinbase-incubated Base, with plans to expand to more networks in the near future.
Merchants can benefit from significantly reduced payment processing fees by accepting cryptocurrency directly instead of traditional credit card payments. Additionally, the open-source nature of the protocol provides opportunities for other platforms to integrate and build on top of Coinbase’s infrastructure.
The launch of the protocol coincides with Coinbase’s efforts to advance its own Layer 2 network, Base, in order to compete in the growing DeFi space.
Photo by David McBee.
