Google has chosen Coinbase to accept cryptocurrency payments in the cloud and will use its custody tool.
Google has chosen Coinbase to accept cryptocurrency payments in the cloud and will use its custody tool. Google said on Tuesday that it will work with Coinbase to let some customers pay for cloud services with cryptocurrencies as early as 2023. Coinbase said it would use Google’s cloud infrastructure.
The deal, which was announced at Google’s Cloud Next conference, could bring cutting-edge companies to Google in a fierce, fast-growing market where Google’s top competitors do not yet let customers pay with digital currencies.
The cloud business helps Alphabet, which owns Google, move away from relying too much on advertising. It now makes up 9% of Alphabet’s revenue, up from less than 6% three years ago, because it is growing faster than Alphabet as a whole.
Jim Migdal, Coinbase’s vice president of business development, said that the company will move data-related applications from the market-leading Amazo Web Services cloud, which Coinbase has used for years, to Google. Most of Coinbase’s revenue comes from retail transactions.
In the beginning, a small number of Web3 customers who want to pay with cryptocurrency will be able to do so, thanks to an integration with the Coinbase Commerce service, said Amit Zavery, vice president and general manager and head of the platform at Google Cloud, in an interview with CNBC. Web3 is a buzzword that has come to mean distributed and decentralized internet services that big internet companies like Facebook and Google can’t control.
Zavery said that over time, Google will let a lot more people pay with cryptocurrency. Coinbase Commerce works with 10 currencies, including Bitcoin, Bitcoin Cash, Dogecoin, Ethereum, and Litecoin. In the past year, the prices of Bitcoin, Dogecoin, and Ethereum have all dropped by more than 60%.
The details of the deal were not made public. Migdal said that, like other Coinbase Commerce deals, Coinbase will get a cut of transactions that go through it.
There was no guarantee that Google would use Coinbase for the payments part of the deal. One way for businesses to accept digital currencies as payment is through PayPal. Zavery said, “We did look at other companies for the cryptocurrency part.” He said that in the end, Coinbase had the most ability.
Google is also looking into how it might be able to use Coinbase Prime, a service that helps businesses store and trade cryptocurrencies in a safe way. Zavery said that Google will try out ways to manage cryptocurrency assets and “see how we can participate.”
Companies like Block (the payments company that used to be called Square), Coinbase, MicroStrategy, and Tesla have added digital currencies to their balance sheets. That can be a dangerous thing to do. In August, Coinbase said it would have to pay $377 million because the value of its cryptocurrency holdings had gone down.
In May, Google said that it was looking into the possibility of letting people pay with digital currencies. Migdal said that Coinbase had been talking to Google for months. These talks were about supporting commerce transactions, using the cloud, and the Prime service. He said, “We chose to bring them together.”
Nonfungible tokens (NFTs), which are a type of blockchain technology, are getting more attention from Google’s cloud division. Thomas Kurian, who is in charge of Google’s cloud, has pushed for growth in big industries like media and retail in the past. This year, it said that it was putting together teams to promote blockchain business and make tools that third-party developers could use to make blockchain apps run.
