Google’s deal with Coinbase: here’s what you need to know

The tech giant will begin allowing some customers to pay for cloud services using “select cryptocurrencies” in early 2023. Here’s what you need to know:

Google has inked a deal with leading crypto exchange company Coinbase / Adobe Stock

What happened:

• Google announced yesterday that a portion of its customers will soon be able to pay for its cloud services using some cryptocurrencies (including Bitcoin), part of a new partnership with leading crypto exchange company Coinbase. The deal will also provide Coinbase, which will receive a portion of each transaction, with a valuable new income stream.

• The new partnership, announced during yesterday’s Google Cloud Next conference, is aimed in part at attracting cutting-edge web3 companies – some of whom are committed to using crypto as opposed to fiat currency as much as possible – to Google.

• The new service, expected to launch in early 2023, will initially only be available to a cohort of web3 brands. It will reportedly be made available to a wider variety of brands over time.

• The payments will be facilitated by Coinbase Commerce, a service that equips merchants with crypto payment systems. Google will also begin using Coinbase Prime, which Coinbase describes as “an integrated platform that provides clients with trading, custody and prime services.”

• Google Cloud announced in a blog post in January that it would begin scaling into web3 with the launch of a “Digital Assets Team,” aimed at supporting “customers’ needs in building, transacting, storing value and deploying new products on blockchain-based platforms.”

Why it matters:

• Paying for cloud services with crypto is a service that is not currently offered by any of Google’s competitors.

• Investing in its cloud services infrastructure has been enabling Google’s parent company Alphabet to diversify its income stream, which is currently dominated by advertising. (More than 80% of Alphabet’s income in the second quarter of 2022 came from Google’s advertising ecosystem, according to Reuters.)

• The partnership is likely to provide a much-needed financial boon to Coinbase, which recently laid off scores of employees and saw its stock price plummet during the “crypto winter.”

• “As this deal has come together, we’ve been working closely with the Google Cloud team for many months,” Surojit Chatterjee, chief product officer at Coinbase, wrote in a blog post published yesterday. “What inspired us the most was seeing that the Google Cloud team recognizes the importance of expanding crypto services and building in web3.”

• “Google accepting Bitcoin through its partnership with Coinbase is a tremendous win for the web3 community,” said Billy Huang, chief executive and co-founder of web3 brand Insomnia Labs. “This move provides a much-needed validation for cryptocurrency enthusiasts who will be able to make crypto transactions processed by one of the most popular and well-respected companies in the world. Although it is for Google Cloud Services, a more backend-driven service, the announcement is still a sign that the tech giant is supportive of cryptocurrencies and blockchain technology. It bodes well for the future of the industry as more companies such as Starbucks and Robinhood start embracing this revolutionary technology, which will open doors to new markets for crypto companies around the world.”

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