Coinbase, one of the largest cryptocurrency exchanges, has partnered with payment processing giant Stripe to bring support for the USDC stablecoin on Coinbase's Layer-2 network, Base. This integration will allow Stripe merchants to accept USDC payments, facilitating faster and cheaper cross-border remittances and settlements.
Under the partnership, USDC will be integrated into Stripe's crypto payouts product, enabling Stripe merchants to receive payouts in USDC on the Base network. This will provide access to faster settlement times and lower fees compared to traditional payment methods.
Additionally, USDC will be available as part of Stripe's fiat-to-crypto on-ramp, making it easier for customers to convert their fiat currency into digital assets. Coinbase will also integrate Stripe's fiat-to-crypto on-ramp into its platform, allowing Coinbase users to purchase cryptocurrencies using credit cards and Apple Pay.
The partnership is expected to drive further adoption of USDC and the Base network. Base, which launched its public mainnet in August 2023, has already amassed over $7 billion in total value locked (TVL), making it the second-largest Layer-2 network at the time of writing.
Coinbase's head of product, Max Branzburg, has previously stated that the company plans to store more of its corporate and customer USDC balances on Base to secure funds with lower fees and settlement times. This partnership with Stripe is a significant step in that direction.
The integration of USDC on Base is also expected to contribute to Coinbase's revenue growth. Industry watchers believe that as Base continues to grow, it could become a significant contributor to Coinbase's top-line revenue.
For Stripe, this partnership marks a return to the crypto space after previously supporting Bitcoin payments in 2014 but later discontinuing the service due to rising transaction times and failure rates. In April 2024, Stripe enabled support for businesses using its platform to accept payments from customers using stablecoins.
The partnership between Coinbase and Stripe comes at a time when the crypto industry is facing increased regulatory scrutiny. Coinbase has taken a proactive stance, suing the U.S. Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC) for failing to comply with Freedom of Information Act (FOIA) requests related to the SEC's decision to exclude Ether from the list of cryptocurrencies it considers unregistered securities.
Additionally, Coinbase has launched the "Stand with Crypto" political action committee (PAC) in the United States to advocate for the industry and its participants. The PAC has already garnered 1 million signatures from crypto advocates.
In conclusion, the partnership between Coinbase and Stripe to bring USDC support to the Base Layer-2 network is a significant development in the crypto industry. It is expected to drive further adoption of USDC and the Base network, while also contributing to Coinbase's revenue growth. The partnership also highlights the growing importance of stablecoins and Layer-2 solutions in the crypto ecosystem.
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