Coinbase has opted to discontinue support for direct Bitcoin payments and other UTXO coins on its merchant payment platform, Coinbase Commerce.
According to Lauren Dowling, Coinbase’s head of product, the decision was announced in a thread on X (formerly Twitter) on February 18. Dowling explained that the company faced challenges in updating its EVM payment protocol for Bitcoin, leading to the removal of native Bitcoin and UTXO coin support.
The updated Coinbase Commerce product now ensures payment details are confirmed on-chain and supports a wide range of assets, including both native and ERC-20 tokens. Payments made through this platform will be automatically converted to USDC at a guaranteed rate for merchants. Dowling cited the absence of smart contracts and stablecoins on the Bitcoin blockchain as obstacles in providing similar functionalities for Bitcoin payments.
Although shoppers can still use Bitcoin via Coinbase Commerce if they have an account with the exchange, Brian Armstrong, the CEO of Coinbase, mentioned plans to integrate the Lightning Network into Coinbase to enhance payment options.
Armstrong expressed optimism about the potential for Lightning Network to facilitate commerce payments in the future. The Lightning Network, operational since 2017, aims to expedite transactions within the Bitcoin blockchain.
Coinbase believes that mainstream adoption of crypto payments online will require moving away from layer 1 solutions to reduce transaction fees and confirmation times. They aim to accelerate this transition.
Bitcoin utilises the UTXO model, which ensures transparency and security in transaction tracking. This model differs from Ethereum’s account model and is also employed by Bitcoin forks like Dogecoin, Litecoin, Dash, and Bitcoin Cash.
The decision to remove native Bitcoin support has faced criticism from the community on social media platforms. Some users argue that this move could hinder Bitcoin adoption, as it assumes all customers have access to a Coinbase account, which is not the case worldwide.
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