Shopify Launches USDC Stablecoin Payments via Exchange’s Blockchain

Shopify has launched early access to stablecoin payments using Circle’s USD Coin (USDC), in a strategic collaboration with a U.S.-based cryptocurrency exchange. The integration is currently being tested on the exchange’s Ethereum Layer-2 blockchain, with a full rollout planned through Shopify Payments and Shop Pay later this year.

Announcing the move, Shopify CEO called stablecoins a “natural way to transact on the internet,” adding that the company worked closely with the exchange to develop the commerce-focused smart contract protocol behind the system. The new payment feature will also support future buyer incentives, including 1% cash back in local currency, enhancing the platform’s appeal for both customers and merchants.

The exchange’s Layer-2 network is the fourth-largest blockchain for USDC, accounting for 6% of the stablecoin’s total supply. Known for its low-cost and high-speed transactions, the network offers Shopify a 24/7 global payment infrastructure, aligning with the company’s goals to streamline cross-border commerce.

Shopify’s latest venture into stablecoins builds on more than a decade of crypto experimentation. The company enabled its merchants to accept Bitcoin as far back as 2013, partnering with third-party gateways. The platform now supports nine alternative crypto payment methods, although it notes that direct methods perform better during high-volume flash sales due to faster settlements.

Shopify and the exchange also have a shared history in crypto innovation. Both were involved in a stablecoin initiative that ultimately shut down after global regulatory resistance.

Shopify has announced a significant development in its payment infrastructure by introducing USDC stablecoin payments via the exchange’s network. This integration allows customers to pay with Circle’s USDC stablecoin, while merchants can receive payouts in their local currency or retain earnings in USDC directly. The system is designed to operate on the exchange’s blockchain, an Ethereum layer-2 network, which supports ultra-fast and affordable transactions. This is crucial for global e-commerce, as it simplifies international transactions by eliminating currency conversion fees and lengthy settlement times.

The rollout of USDC payments on Shopify will begin with early access and is expected to expand to more merchants throughout 2025. Shopify CEO highlighted that the integration uses a new smart contract-based payment protocol specifically designed for e-commerce transactions. This protocol eliminates the need for third-party crypto gateways or additional plugins, streamlining the payment process for merchants.

The USDC payment system is a result of a strategic partnership between Shopify, the exchange, and a payment processing company. This collaboration has developed an open-source payments protocol built on the exchange’s blockchain, enabling standard payment features such as refunds, chargebacks, delayed capture, and built-in regulatory compliance. The payment processing company has supported the backend integration to abstract the complexity of crypto payments from the merchant experience, making it more user-friendly.

To encourage adoption, the partnership introduces financial incentives. Merchants processing USDC transactions can earn up to 0.5% cashback on sales, while US-based customers paying with USDC will receive 1% cashback on purchases. This customer cashback promotion is expected to launch before the end of 2025, further incentivizing the use of USDC for transactions.

The integration of USDC payments aims to simplify cross-border commerce for businesses. Traditional cross-border payments often involve multiple intermediary institutions, currency conversion fees, and lengthy settlement times. Blockchain-based stablecoins like USDC can settle quickly with minimal fees and without currency conversions, benefiting small and medium-sized businesses seeking to expand into global markets. This approach allows transactions to process without the typical barriers of international commerce, enabling merchants to serve customers across different countries and currencies more efficiently.

However, Shopify’s decision to support USDC exclusively on the exchange’s network has drawn criticism from some industry leaders. Critics argue for broader blockchain interoperability, suggesting that supporting multiple blockchains would increase access and reduce transaction friction. This criticism reflects an ongoing debate in digital payments about chain-agnostic strategies and the composability of stablecoins across different networks.

Despite the criticism, Shopify plans to make USDC payments available to all merchants globally by the end of 2025. The company has not announced plans to expand beyond the exchange’s blockchain support at this time, focusing on leveraging the benefits of the network for its current integration. This move underscores Shopify’s commitment to enhancing its payment infrastructure and providing more options for its merchants and customers in the evolving landscape of digital payments.