Cryptocurrency exchange Coinbase made waves this week with the launch of its new open source payment protocol Onchain, aimed at improving the company’s Commerce product for merchants.
The San Francisco-based exchange announcement the new protocol on Thursday, describing it as a way to enable “instant settlement, low fees and broad asset support” for traders using its services. Coinbase Commerce was first introduced in 2018 as a platform for merchants to accept cryptocurrency payments. Since then, the company says thousands of merchants around the world have processed billions of dollars in on-chain payments.
However, the volatility of cryptocurrencies and the complexity of user experiences remain obstacles to wider adoption. Coinbase’s new open-source protocol seeks to address these issues by automatically converting customers’ cryptocurrency payments to USDC stablecoin, eliminating exposure to volatility. The protocol currently supports Ethereum, Polygon, and the Coinbase-incubated base – and plans to expand to more networks soon.
Merchants can benefit from significantly reduced payment processing fees by directly accepting cryptocurrencies rather than traditional credit card payments. The open source nature of the protocol also opens the door for other platforms that can integrate and build upon Coinbase’s infrastructure.
The launch comes as Coinbase continues the development of its own layer 2 network, Base, to capture market share in the hot DeFi space.
photo by David McBee.