Coinbase, America's largest cryptocurrency exchange, has added support for the Lightning Network to its platform to enable faster and cheaper payments.
According to a blog post, Coinbase's Lightning Network integration will reduce the cost of sending Bitcoin (BTC) around the world compared to the 2% charged on U.S. credit card transactions and the $30 paid on wire transfers. It is reduced by a factor of 20.
Coinbase integrates Lightning Network
Coinbase's Lightning Network integration was led by Lightspark, a lightning infrastructure provider led by David Marcus, co-founder of payments giant PayPal. Earlier this month, the cryptocurrency exchange announced plans to partner with Lightspark to advance Lightning integration.
Due to the high costs and delays of traditional payment systems, Coinbase has pushed ahead with plans to enhance its blockchain payment services. The company revealed that U.S. consumers spent about $75 billion in credit card transaction fees in 2022, and to make matters worse, most of them were delayed by several days.
As future payments will be encrypted, Coinbase said it is committed to enabling faster, cheaper, and more secure payments through blockchain technology integrated with the Lightning Network. Customers can now perform BTC transfers instantly, instead of the 10 minutes to two hours it previously took for on-chain transactions to be processed.
“Coinbase is excited to continue to revolutionize traditional payment systems using cryptocurrencies. Faster and cheaper access to money is especially important to the unbanked and unbanked communities. It is critical to bridging the gap in access to financial tools for communities without access to financial tools.
“These blockchain-based innovations will free up capital trapped in unnecessary fees and payment delays, allowing consumers and businesses to do more with their money,” the company said.
Not available in all regions
Notably, Coinbase's Lightning Network integration is not currently available in all regions. Users in New York and Canada cannot access the service at this time, according to information on the exchange's help center. Also, the cost difference between Bitcoin and the Lightning Network does not apply to all Coinbase transfers.
Meanwhile, Coinbase is not the only cryptocurrency exchange to add support for the Lightning Network. Binance, the world's largest trading platform, did the same in July 2023, joining Kraken, Bitfinex, and OKX.