Coinbase and Shopify launch an open Commerce Payments Protocol enabling stablecoin payments with escrow-based authorize and capture.
The protocol brings trustless, gas-sponsored crypto payments to e-commerce by supporting refunds, voids, and programmable transactions.
Its permissionless design allows anyone to operate or integrate the system, encouraging innovation in decentralized onchain commerce.
Brian Armstrong, CEO of Coinbase, has announced a protocol set to transform onchain commerce payments. Partnering with Shopify, the company developed the Commerce Payments Protocol — an open standard for developers, merchants, and platforms. This move bridges a gap in crypto payments by enabling complex transactions previously unsuited for onchain systems.
The protocol introduces a two-step “authorize and capture” process similar to traditional payment systems. First, a buyer authorizes payment by moving funds into escrow. After the order is verified, the merchant later receives those monies. Several transaction types, such as split deliveries, refunds, and cancellations, are supported by this structure. As a result, it gives retailers the adaptability they require for actual business.
Onchain Payments Get Commerce-Ready
Previously, crypto payments thrived in peer-to-peer transactions but lacked support for structured, multi-phase purchases. Consequently, large-scale e-commerce adoption lagged. Armstrong’s protocol solves this by offering a programmable escrow mechanism that mimics traditional finance workflows. Besides, the system preserves blockchain integrity and transparency throughout.
Operators handle fund transitions between buyers and merchants, sponsoring gas fees and managing confirmations. However, they cannot alter terms, reuse authorizations, or block funds. This preserves the trustless nature of crypto while boosting user experience.
Additionally, the protocol includes four core functions — authorize, capture, charge, and refund. “Charge” immediately settles funds to merchants. “Void” cancels payments and returns funds to buyers. “Refund” reverses captured payments. Hence, all possible transaction outcomes are covered.
Open and Permissionless Architecture
The Commerce Payments Protocol is unchangeable and completely permissionless. It can be integrated or operated by anybody, including independent developers, Coinbase platforms, and even buyers and merchants. This adaptability promotes decentralized involvement and creativity throughout the cryptocurrency ecosystem.
Moreover, operators can include smart contracts with custom logic. This ensures automation while preserving core safeguards. The protocol’s design ensures no central party can shut it down or alter its rules. Hence, the standard promotes resilience and transparency for the future of digital payments.
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