Coinbase (COIN, Financial) is introducing a platform to make stablecoins the preferred payment method for online transactions. This initiative marks a significant step towards mainstream adoption of cryptocurrencies pegged to the US dollar. Recently, a landmark stablecoin bill was passed by the US Senate, and major retailers have shown interest in using stablecoins for online payments, a market worth approximately $6 trillion. This could bypass traditional credit card networks like Visa (V) and Mastercard (MA).
Coinbase's new system is designed to seamlessly integrate with existing payment processes, targeting platforms like Shopify (SHOP) and eBay (EBAY), which serve numerous small and medium-sized businesses looking to avoid credit card fees. Currently, most of Coinbase’s revenue comes from cryptocurrency transaction fees. Benchmark analyst Mark Palmer suggests this payment initiative could diversify revenue sources beyond transaction volume.
Shopify is Coinbase's first client, collaborating to allow merchants to accept USDC via Coinbase's Base network, a Layer 2 blockchain built on Ethereum. This new service promises faster settlement, lower fees, and global customer access. Additionally, JPMorgan announced a pilot project for tokenized dollar deposits on the Base chain.
Coinbase also aims to simplify stablecoin payments for merchants without blockchain expertise and has signed an agreement to use USDC as collateral for US futures trading. Furthermore, Coinbase seeks SEC approval for a tokenized equities service.
