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Highlights
- Coinbase said it will start storing user's USDC balances on Base
- Base is the exchange's layer-2 scaling network
- The exchange said this will impact settlement fees, making it lower
American cryptocurrency exchange Coinbase is introducing more functionalities to its Layer-2 protocol Base Network, a feature that includes the storage of its user’s USDC balance.
Exchange Hints Base’s New Functionality
Max Branzburg, Vice President, Head of Consumer Products at Coinbase took to X to announce the next step that the company is taking with regards to Base. According to Branzburg’s X post, Coinbase is looking to increase its storage of corporate and retail customers’ USDC balance on Base.
Choosing to make this move means that the firm can conveniently manage and secure customer funds with lower fees while also achieving faster settlement times. In the long run, the goal is to ensure that Coinbase user experience is not negatively impacted by the improved functions. The publicly traded exchange sees this new development as an avenue to push its business on-chain.
1/ Going forward, Coinbase is going to be storing more corporate and customer USDC balances on Base. This enables us to manage and secure customer funds with lower fees and faster settlement times, with no impact to the Coinbase user experience.
We are excited to continue to…
— Max Branzburg 🛡 (@maxbranzburg) March 26, 2024
Markedly, the decision to increase storage of both corporate and customers’ USDC balance on its L2 protocol is coming right after the firm docked down on the United States dollar-pegged stablecoin payment. A few days ago, Coinbase entered into a strategic partnership with Compass Coffee, a prominent veteran-owned coffee chain based in Washington D.C.
This deal requires that Compass Coffee accept USDC as a settlement option in a bid to expose customers to the advantages of using cryptocurrency payments, particularly USDC. Increased adoption of USDC is bound to also trigger the need for a larger storage protocol, further validating Coinbase’s new project.
Coinbase Pushes Industry To Accept USDC Storage
Coinbase is hopeful that other companies will adopt this USDC storage move that it is choosing to adopt. Furthermore, Coinbase assured its users that their funds are secured as it does not repurpose customers’ funds.
For context, the crypto exchange explained it does not engage in my form of lending that jeopardizes users’ deposits. There is an exception for customers who specially request that their funds be redirected.
At the same time, Coinbase customers have been warned to take note of the increase in transaction fees on the Base Network owing to another Coinbase congestion saga. Customers are advised to remain vigilant while the protocol finds a lasting solution to the problems pestering its ecosystem.
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