Coinbase drops native Bitcoin payments from merchants’ platform

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Coinbase has removed support for native Bitcoin (BTC) and other UTXO coins from its payment platform for merchants, Coinbase Commerce.

Coinbase has removed support for native Bitcoin and other UTXO coins from its payment platform for merchants, according to the company’s head of product, Lauren Dowling.

In a Feb. 18 thread on X (formerly Twitter), Dowling said the company “made the difficult decision to remove native Bitcoin & other UTXO support” from Coinbase Commerce, citing difficulties in delivering recent updates on its EVM payment protocol for Bitcoin.

“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.”

Shoppers paying with Coinbase Commerce will still be able to use Bitcoin if they have an account with the exchange, noted its CEO Brian Armstrong on X, adding that the company is in the process of integrating the Lightning Network into Coinbase.

“Hopefully there are opportunities to make commerce payments with Lightning in the future,” commented Armstrong. The Lightning Network is a payment protocol designed to facilitate transactions within the Bitcoin blockchain. Bitcoin transactions have been running on the protocol since 2017.

“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.”

To keep track of transactions, Bitcoin uses the UTXO model, or Unspent Transaction Output. It’s designed for transparency and security, in contrast to Ethereum’s account model which is similar to traditional bank accounts and allows more flexibility. The UTXO model is also used by coins forked from Bitcoin, like Dogecoin (DOGE), Litecoin (LTC), Dash (DASH), and Bitcoin Cash (BCH).

The decision to remove native Bitcoin sparked community criticism on social media platforms, with some users pointing out how the removal affects Bitcoin adoption.

“Is it assumed every customer is in the US and able to open a Coinbase account and/or that every customer would want a Coinbase account? That’s like dictating that every customer has to be a Bank of America customer in order for merchants who simply bank with BofA to accept payments,” noted a pseudonymous user.

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