Shopify partners with Coinbase and Stripe in landmark stablecoin deal
The publicly traded tech company lets merchants—including vintage clothes sellers, cosmetics businesses, and electronics companies—set up their own online marketplaces. By late June, Shopify will let a select group of users accept payments in USDC, a stablecoin issued by the crypto company Circle, which recently had one of the year's hottest IPOs.
'In our own philosophical framework, we are extremely aligned with everything that crypto stands for,' Tobias Lütke, the CEO of Shopify and a Coinbase board member, said onstage at a Coinbase conference on Thursday.
Shopify will then gradually expand access to merchants across its network in the U.S. and Europe before opening up stablecoin payments to every merchant who uses its platform. The e-commerce company worked with Coinbase to develop a payments protocol to handle chargebacks, refunds, and other intricacies of retail payments on Coinbase's blockchain, Base. It also collaborated with fintech giant Stripe, one of Shopify's payments processors, to integrate stablecoins into the e-commerce company's existing software stack.
'I think other payment processors will look at what Shopify is building and be like, 'Holy crap,'' Jesse Pollak, a Coinbase executive who oversees the crypto exchange's wallet and blockchain divisions, told Fortune.
Shopify's plunge into crypto comes as stablecoins, or cryptocurrencies pegged to assets like the U.S. dollar, become one of the buzziest sectors outside of AI in Silicon Valley. Rather than wait days for a bank wire to clear, advocates say that stablecoins reduce cross-border transfer fees and speed up transactions.
Tech giants like Meta, Apple, X, Airbnb, and Google have taken notice and have all been in talks with crypto companies to explore stablecoin integrations. Moreover, the Senate is poised to pass legislation that regulates the crypto assets. And Stripe has acquired two crypto startups in the past year as it looks to carve out its own crypto payments strategy.
'This will be the beginning of a lot of dominoes falling,' Pollak, the Coinbase executive, told Fortune, in reference to Shopify's own stablecoin play.
That being said, this isn't the first time the publicly traded e-commerce company has dipped its toes into crypto. Shopify, headquartered in Ottawa, has long let third-party software developers like Crypto.com and Strike provide plug-ins for merchants to accept cryptocurrencies like Bitcoin, Ethereum, and even USDC for payment.
However, these integrations came from developers outside Shopify and were opt-in, meaning that merchants had to explicitly choose to integrate crypto payments into their online marketplaces.
Shopify's most recent stablecoin play is opt-out. Merchants will have to adjust their settings to not accept payments in USDC, a Coinbase spokesperson told Fortune. Moreover, the payments protocol Coinbase developed with Shopify is the product of executives and developers from both companies collaborating over the past nine months, Pollak said.
Shopify will give merchants who accept USDC up to 0.5% cash back in the U.S. and other countries, and it plans to also give customers who decide to pay with USDC an unspecified percentage of cash back later this year.
This story was originally featured on Fortune.com
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