*Asia Stablecoin Alliance is launched by Heechang Kang and Jinsol Bok from Four Pillars, along with Alex Lim (Jongkyu Lim), the Korea lead at LayerZero, to accelerate stablecoin adoption across Asia and to serve as a research and community hub for establishing clear stablecoin strategy and technical infrastructure. (X Link, Substack Link)
Shopify is an all-in-one ecommerce service that helps merchants easily operate their online and offline stores. Recently, Shopify announced a partnership with Coinbase and Stripe to offer USDC as a payment option.
Buyers can connect their Web3 wallet holding USDC on the Base network and make payments easily. In this payment structure, Base plays the role of the card network and the Web3 wallet acts as the card issuing bank, bypassing both.
Going further, Shopify's USDC payments support Coinbase's Commerce Payments Protocol. This is a smart contract-based dispute resolution protocol that reduces the risk of payment failures for buyers and sellers through escrow and enables features like refunds and cancellations.
Shopify is an all-in-one ecommerce service that helps merchants handle everything from product sales to marketing, logistics, payments, and analytics within a single platform. While Amazon operates as an online marketplace where many sellers can list products on the same platform, Shopify offers tools for merchants to build their own independent websites where they can manage their domain, design, branding, and customer relationships directly.
Depending on the plan, Shopify provides merchants with dozens of features. These include popular tools like an online store editor, online payments, and offline POS support, as well as capabilities spanning marketing, shipping, B2B, payments, analytics and reporting, developer tools, and financial management—covering every aspect of ecommerce from A to Z. Well-known brands that use Shopify include Gymshark, Allbirds, and Red Bull.
Source: Shopify
Shopify allows merchants to offer a variety of payment options. By default, it supports credit and debit cards as well as PayPal, and also provides an accelerated checkout service through Shop Pay. This feature enables customers to store their credit card, billing and shipping addresses, email, and phone number, so they can complete purchases quickly with just Shop Pay at any participating store.
By offering convenient solutions to ecommerce sellers, Shopify currently supports around 2.5 million online stores. In just Q1 2025, it recorded approximately $75 billion in GMV (Gross Merchandise Volume), and Shop Pay alone has more than 150 million users worldwide.
Source: Coinbase
On June 12, 2025, Shopify announced in partnership with Coinbase and Stripe that it would support USDC as a payment option announcement. Customers will now be able to make payments on Shopify-based online stores using USDC on the Base network. Going forward, merchants using Shopify can support USDC payments and gain access to a broader global customer base.
From the perspective of stablecoins as a next-generation payment system, this USDC payment support by Shopify, Coinbase, and Stripe holds two major implications. These are 1) a payment system that bypasses card networks and issuing banks and 2) a smart contract-based dispute resolution system for payments.
In Shopify's USDC payment option, payments are processed as follows:
The customer connects a crypto wallet holding USDC on the Base network and makes a payment.
The USDC is processed through the “Commerce Payments Protocol” on the Base network and delivered to Shopify.
Shopify typically converts the USDC to fiat currency and settles with the merchant, but if the merchant prefers, they can receive the USDC directly in their crypto wallet.
Isn't that simple? Compared to the traditional card payment model involving PSPs, acquirers, card networks, and issuing banks, this is significantly simpler and, most importantly, bypasses card networks and issuing banks.
In the traditional payment model, the card network connects the merchant's bank account with the customer's issuing bank account. This intermediary process results in high fees and longer settlement times.
So why does Shopify’s USDC payment not need a card network or issuing bank?
Because the customer holds USDC directly in their Web3 wallet. Instead of paying with fiat currency stored in a bank account, the customer now holds USDC directly in their wallet and uses it for payment.
Because the Base network replaces the role of the card network. The USDC held by the customer is transferred to Shopify and the merchant through an intermediary smart contract on the Base network.
2.3.1 Overview
Traditional payment systems include more than just transferring money. This is because various scenarios can occur, such as the item going out of stock before payment is completed or the customer or merchant canceling or requesting a refund for part or all of the order. If the payment system only transferred funds from the customer to the merchant, many problems would arise.
For this reason, blockchain-based stablecoin payment systems have received criticism. Payments on the blockchain are instant and irreversible, so how can transaction disputes be handled? To address this, Coinbase introduced a smart contract-based dispute resolution protocol called Commerce Payments Protocol and implemented it into Shopify's USDC payment option.
The core of the Commerce Payments Protocol is dividing the payment process into authorization and capture, just like in traditional payment systems.
Funds from the buyer are held in an escrow smart contract in advance, and then the payment is finalized later, which reduces the risk of disputes or failures for both the buyer and the seller. In traditional payments, buyers do not pay fees, but on the blockchain, buyers must pay transaction fees. To address this, an operator role is added to handle fees on behalf of the buyer.
An operator is a third-party address that executes the actual transaction between the buyer and the seller. Once the buyer signs and expresses their intent to pay, the operator broadcasts the blockchain transaction on their behalf. The operator requires no trust assumptions and is restricted from performing the following three actions:
Cannot change payment intent: The operator can never modify the original payment details signed by the buyer (such as recipient, amount, token type, expiration). If modified, the hash of the buyer’s signature changes, allowing immediate detection of tampering. Also, the buyer's signature can only be used once, eliminating the risk of future misuse.
Cannot lock funds: The operator does not have permission to arbitrarily transfer or steal the buyer’s funds.
Cannot interfere with other operators: Since anyone can be an operator, it is important to prevent malicious operators from attacking honest ones. To address this, when the buyer signs a purchase, they can include the operator’s address in the payment information. This ensures that only the designated operator can process the transaction, and payments handled by different operators are stored in separate escrows.
2.3.2 Operation Types
The payment process in the Commerce Payments Protocol consists of six key operations.
Authorize
Using the ERC-3009 standard, the buyer signs the transaction, and the operator can transfer the buyer’s funds to the escrow smart contract through “authorize.” The buyer does not pay network fees. The protocol enforces that the signature is only valid within a specific timeframe. By locking the buyer’s funds in escrow in advance, the seller is guaranteed payment, and final settlement can be done later.
Capture
The operator uses “capture” to transfer the buyer’s authorized funds in escrow to the merchant, completing the payment. Interestingly, “capture” can be executed partially and multiple times. This means funds can be released in stages depending on product or service delivery. The “capture” must be done before the expiration set during the “authorize” step.
Charge
“Charge” combines “authorize” and “capture” into a single transaction. It is used when delayed settlement is unnecessary, such as for micro-payments or digital goods.
Void
If funds are locked in escrow through “authorize” and “capture” has not occurred, the operator can cancel the transaction through “void.” Since the funds have not yet reached the merchant, a full refund is possible. This is used in cases like system errors, duplicate orders, incorrect addresses, out-of-stock issues, or failed deliveries.
Reclaim
Functionally similar to “void,” but executed by the buyer instead of the operator. If a certain amount of time has passed after “authorize” and the operator has not executed “capture” or “void,” the buyer can recover their funds from escrow using “reclaim” after the expiration period.
Refund
Even after “capture” has been completed and the funds have been sent to the merchant, the operator can still process a refund through “refund.” This can also be done via ERC-3009. However, all refunds have an expiration window. Once that time passes, the transaction is in a fully “captured” state and refund is no longer possible. This prevents issues like indefinite refund requests.
2.3.3 Full Payment Flow
Based on the above operations, the complete payment flow is as follows:
The merchant asks the buyer to sign the payment information.
The buyer signs through their Web3 wallet, and the merchant forwards the signed data to the operator.
The operator broadcasts an “authorize” transaction using the signed data.
Once the “authorize” transaction succeeds, the buyer’s funds move to the escrow smart contract, and the system sends a message to the buyer confirming the payment (though the funds have not yet been transferred to the merchant).
Later, depending on the delivery situation, the merchant can instruct the operator to execute either “capture” or “void” to complete the transaction.
2.3.4 More Than Just Payments
This smart contract-based Commerce Payments Protocol enables much more than simple payments and refunds. By using smart contracts instead of simple EOA addresses for the operator or merchant, the payment protocol can be extended further.
For example, if the operator’s role is implemented through a smart contract, additional logic such as KYC, conditional approvals, and split transactions can be integrated. Royalties, fee distribution, and signature verification can also be automated. Likewise, if the merchant role is implemented via a smart contract, it becomes possible to support functions like revenue sharing among multiple partners or automatic token swaps for received payments.
The collaboration between Shopify, Coinbase, and Stripe presents a vision and direction for stablecoin-based payments. The stablecoin payment system they demonstrated allows customers to bypass issuing banks by using self-custodial wallets, and lets the Base network take the role of the card network, reducing fees. Furthermore, they introduced a system that enables dispute resolution through a smart contract-based Commerce Payments Protocol.
Similar developments are happening elsewhere. PayPal’s PYUSD processes payments on PayPal’s backend, but it still bypasses card networks and issuing banks. USDC issuer Circle also introduced its Refund Protocol, a smart contract enabling payment mediation much like the Commerce Payments Protocol.
These examples suggest that the future direction of payment systems is becoming clearer. Stablecoin-based payments could replace traditional systems with only roles like PSP and acquirer remaining. Whether more fintechs will follow in the footsteps of Shopify remains to be seen.
Dive into 'Narratives' that will be important in the next year
Recall
Bitcoin
Arch