Cryptocurrency exchange Coinbase made headlines this week with the launch of a new open-source on-chain payments protocol aimed at improving the company’s commerce products for merchants.
San Francisco-based exchange announced The new protocol was announced on Thursday and is described as a way to enable “instant payments, low fees, and broad asset support” for merchants who use the service. Coinbase Commerce was first introduced in 2018 as a platform for merchants to accept cryptocurrency payments. Since then, thousands of merchants around the world have processed billions of dollars in on-chain payments, the company said.
However, cryptocurrencies’ volatility and complex user experience are barriers to widespread adoption. Coinbase’s new open-source protocol seeks to solve these problems by automatically converting customers’ cryptocurrency payments into the popular stablecoin USDC, eliminating exposure to volatility. The protocol currently supports incubated bases on Ethereum, Polygon, and Coinbase, but plans to expand to more networks soon.
Merchants can benefit from significantly lower payment processing fees by directly accepting cryptocurrencies rather than traditional credit card payments. The open source nature of this protocol may also allow other platforms to integrate and build on his Coinbase infrastructure.
The launch comes as Coinbase continues to develop its own layer-2 network, Base, to gain market share in the hot DeFi space.
Photo provided David McBee.