Coinbase Commerce is using Ethereum’s latest software upgrade, Constantinople to add support for the popular stablecoin, US Dollar Coin (USDC), to its platform.
The platform is an application which allows online vendors to accept payments in cryptocurrency and integrate the payments in their business cash flows. The application was launched by Coinbase earlier last year. Using Coinbase Commerce, merchants around the world can accept cryptocurrencies into a user-controlled wallet. The product is different from their previous ones as it is not a hosted service and so allows merchants to have full control over their own digital currencies. The service is non-custodial, which means that Coinbase does not act as a middle man, and all transactions are directly between customers and merchants. This increases decentralisation but it also means that no one can prevent the movement of funds once a payment has been initiated.
When launched, Coinbase Commerce supported Bitcoin (BTC), Ether (ETC), Litecoin (LTC) and Bitcoin Cash (BCH). With the new update, merchants can now also accept the Ethereum-based USDC. One reason they felt it necessary to add a stablecoin is the volatility of non-fiat-backed cryptocurrencies. According to Coinbase, this posed a problem as merchants face fiat-denominated business costs.
In a blog post on August 14th, a Coinbase developer outlined how Ethereum’s Constantinople upgrade allowed the platform to adopt USDC. In essence, the update facilitates the usage of non-custodial smart contracts to process ERC20 payments on a large scale. The CREATE2 feature of the upgrade now allows certain workflows which were not possible before and which prevented the adoption of ERC20 tokens. The upgrade allows smart contract interactions to take place off-chain by showing an address which doesn’t exist on the blockchain but which can receive payments. Without CREATE2, there will be a need to deploy to the blockchain to show users the address they need to pay to.
First Published at Coinbase Commerce Using Ethereum Upgrade to Support USDC – OBN