On June 27, Coinbase and Stripe announced a significant collaboration aimed at enhancing crypto payment systems. The partnership will incorporate USD Coin into Stripe’s crypto payment options, enabling swift financial transactions across more than 100 nations. In return, Coinbase will leverage Stripe’s fiat-to-crypto platform, facilitating crypto purchases via credit cards and Apple Pay.
Stripe’s Crypto Journey
Earlier this year, John Collison, co-founder and president of Stripe, underscored the company’s evolving commitment to cryptocurrencies. At the Sessions conference, Collison confirmed that stablecoins would be reintroduced into Stripe’s offerings. Stripe initially embraced Bitcoin in 2014, becoming one of the first payment services to do so, but later withdrew its support, citing Bitcoin’s inefficiency as a payment method.
Following the announcement of Stripe’s renewed interest in cryptocurrencies, the company introduced Avalanche C-Chain support for its verified customers. This update allowed Stripe users to trade AVAX, marking a significant step in expanding their crypto capabilities.
How Is Coinbase Adapting?
In the United States, the cryptocurrency sector has faced substantial scrutiny and regulatory pressure. This environment has fueled uncertainties, particularly around centralized exchanges and stablecoin providers. For instance, Stripe withdrew from Facebook’s Libra project due to regulatory pressures.
On June 27, Coinbase escalated its legal battle against the Securities and Exchange Commission (SEC) and the Federal Trust and Deposit Corporation (FDIC). The lawsuit claims these state institutions failed to provide essential information under the Freedom of Information Act (FOIA), with the SEC’s stance on Ethereum being a focal point.
Key Takeaways from the Partnership
- Integration of USD Coin into Stripe enhances global transaction speed.
- Coinbase benefits from Stripe’s fiat-to-crypto system for diverse payment methods.
- Stripe’s re-entry into the crypto space could bolster market confidence.
- Coinbase’s legal actions may clarify regulatory stances on cryptocurrencies.
The lawsuit specifically questions why Ethereum is not considered a security, unlike Ripple’s XRP, shedding light on the inconsistencies in regulatory approaches.