Coinbase and Stripe announced a strategic partnership that will give their respective platforms’ capabilities in handling fiat-to-crypto and crypto-to-fiat transactions.
Under the agreement, Stripe and Coinbase will benefit from three key integrations. First, Stripe users will have the option to receive crypto payouts in stablecoin USD Coin (USDC) on Base. Customers will also be able to convert fiat to USDC.
Finally, Coinbase will integrate Stripe’s fiat-to-crypto onramp into Coinbase Wallet, allowing Stripe users to purchase cryptocurrencies using credit cards or Apple Pay.
A Long Time Coming
Although Stripe started accepting crypto payments in 2014, it halted crypto transactions in 2018 because of bitcoin’s volatility. The payments processor has been hinting at a return to crypto support for some time, and the new integrations with Coinbase are expected to launch as early as this summer.
Coinbase’s Layer 2 Network, Base, has become a popular option because it offers increased efficiency at a lower expense. USDC is a stablecoin on Base that tracks the U.S. dollar one-to-one.
Stablecoins have been increasingly adopted by major payments processors, in part because they provide a secure medium to transfer funds cross-border. Stripe asserts that its USDC support will facilitate more efficient cross-border transfers to 150 countries.
Ups and Downs
The partnership is another positive step for Coinbase, which has experienced an impressive Q1 fueled by a surge in the crypto market. One reason for the uptick was the approval of bitcoin ETFs, most of which are managed by Coinbase.
However, it hasn’t been all good news for the crypto exchange recently. Coinbase has continued to fight legal battles with the U.S. Securities and Exchange Commission, which contends that many of the funds and tokens on the exchange should be considered securities, implying that Coinbase has been operating as an unregistered broker.
Consequently, Coinbase brought its own allegations against the SEC, suing the commission for refusing to release documents related to previous Ethereum probes. While its unclear how the crypto exchange’s legal issues will end, the partnership with Stripe has so far been dubbed a victory for both platforms, and a significant step toward mainstream crypto adoption.
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