Why Did This Major Cryptocurrency Exchange Remove Native Bitcoin Payments?

This article is brief:

-Cryptocurrency exchange Coinbase stopped local bitcoin payments due to operational hurdles.

-Lauren Dowling, head of product at Coinbase, launched an on-chain payment protocol to address customer concerns.

-The news comes as JPMorgan upgraded Coinbase Global (COIN) to Neutral, causing the stock to soar 10%.Bitcoin Miner

An executive at cryptocurrency exchange Coinbase Digital Payment Services announced that the company has made the difficult decision to remove native Bitcoin and other UTXO support.

Lauren Dowling, head of product at Coinbase Commerce, said customers are facing operational challenges with the product.

Coinbase Commerce Stops Offering Native Bitcoin Payments

In a series of posts on X (formerly known as Twitter), Dowling emphasized that customers were facing significant challenges with Coinbase Commerce due to the risk of cryptocurrency volatility, the manual actions required to resolve incorrect payments, and limited asset support.

Dowling clarified that to address these issues, they developed an on-chain payment protocol utilizing smart contracts and other tools to enable seamless off-chain commerce.

“In addressing these issues, we saw an opportunity to build an open on-chain payment protocol using smart contracts and other EVM tools to enable seamless on-chain commerce without the operational and financial burdens of a legacy system.”

Dowling noted, however, that the exchange is continually exploring other ways to offer payment solutions to its customers, including the use of Lightning Network and Solana.

Coinbase Commerce Shares Rise After Dropping Local Bitcoin Payments

Meanwhile, Coinbase shares recently spiked after positive comments from a major investment bank.

COIN rose 10% after JPMorgan upgraded the exchange’s stock rating to Neutral. The bank’s experts see potential in COIN, given its close correlation to the ongoing bitcoin price momentum.

COIN’s price reached $180.31 before the market closed over the weekend of February 16th.

COIN stock price chart for 1 month. Source: Google Finance

With bitcoin hitting $52,400, JPMorgan analyst Kenneth Worthington upgraded COIN to Neutral from Underweight. Last month, Kenneth downgraded the stock to an $80 rating, suggesting a potential 35% decline.

As of this writing, the price of Bitcoin is $52,014.

In the meantime, Coinbase customers are advised to be cautious about clicking on any email links claiming to be from Coinbase. It is likely a scam that is trying to steal all of their cryptocurrency.

However, the scheme is known as the Coinbase Reset Scam. It involves crypto scammers collecting personal information from users and tricking them into resetting their Coinbase login credentials. Media outlets have recently reported that these scammers stole over 1,400 ETH from their victims, with an estimated value of $4 million.