Native Bitcoin Support Ends on Coinbase Commerce

Coinbase has announced a big change to its payment processing platform, Coinbase Commerce, impacting how Bitcoin and other UTXO-based cryptocurrencies are used for merchant transactions. Lauren Dowling, Coinbase’s Head of Product, revealed on X (formerly Twitter) the strategic withdrawal of native Bitcoin and UTXO coin support. This decision stems from the complexities encountered in updating the platform’s EVM payment protocol to accommodate Bitcoin transactions.

Dowling explained, “The new Commerce product enforces the details of each payment onchain, supports hundreds of assets (native and ERC-20s) […] automatically converts payments to USDC onchain at a guaranteed rate to merchants. 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.”

This shift means that while Coinbase Commerce will continue to facilitate Bitcoin payments, it will require customers to have a Coinbase account to do so. Addressing the change, Coinbase CEO Brian Armstrong emphasized the company’s efforts to integrate more advanced transaction solutions, notably the Lightning Network, into Coinbase’s ecosystem. Armstrong said, “Hopefully there are opportunities to make commerce payments with Lightning in the future.” He further commented on the future of online crypto payments, stating, “Zooming out – we think paying for stuff online with crypto won’t really go mainstream until we get off layer 1, and reduce transaction fees and confirmation times, so we’re trying to accelerate the move toward that world.”

The move away from native Bitcoin support has sparked discussions within the cryptocurrency community, particularly concerning its potential impact on the broader adoption of Bitcoin. The UTXO model, which underpins Bitcoin transactions, offers a different approach to transaction tracking and security compared to the account model used by Ethereum and other cryptocurrencies, which resemble more traditional banking transactions.