Coinbase to Pause Ethereum (ETH) Deposits & Withdrawals During the Merge

Despite Wanting to Contribute to Economic Freedom, ETH Transactions Will Be On Lock.

Coinbase To Pause Ethereum Deposits and Withdrawals During The Merge

As the top players of the crypto game are eagerly waiting for “The Merge,” the largest American crypto exchange, Coinbase, has announced its plans for the switch to ETH 2.0, or more popularly known as “The Merge“, which will go live on Ethereum’s (ETH) mainnet on September 15, 2022, according to the latest input from co-founder Vitalik Buterin.

Coinbase Is Moving Extra Cautiously

The official blog post also reminded us that contrary to popular belief, The Merge won’t reduce fees by itself, but is rather the path to start with, as ETH 2.0 is needed to expand the blockchain’s scalability map. This gives more ability to scale and increase compatibility with DeFi apps and various scripting languages.

However, the biggest advantage that the upgrade brings is carbon emission reduction by 99.95%, which would deem the second largest blockchain eco-friendly, making it more suitable for global adoption. Ultimately, Coinbase assures that they “will support ETH 2.0 in a variety of ways that align with our mission to increase economic freedom in the world.”

Furthermore, the staked Ethereum (ETH) that’s known on the platform as ETH2 will have to be kept frozen until early 2023, according to the blog post. That’s the timeframe for the highly anticipated upgrade to fully complete, so any users who are planning to use their Staked Ether (stETH) should initialize deposits and withdrawals beforehand.

According to Coinbase, this move is crucial to ensure a smooth transition. The extra security at this phase is most necessary because of the increased scammer activity, as Coinbase points out. Apparently, there are a lot of fraudsters asking the people in the crypto community to send their Ethereum (ETH) tokens in order to “upgrade to ETH 2.0.”

Despite being as cautious as a fox, Coinbase Global’s shares tumbled by another 9% after the message. Moreover, the company is still licking its wounds after the crypto winter, being down by $1.1 billion for the second quarter of 2022. As Coinbase’s shares shrank by 5 times since its all-time high, the decision to halt ETH-related deposits and withdrawals might not help the case.

Binance and Tether Show Support for “The Merge”

The support message from Coinbase comes just a week after another heavy player in the crypto game, Binance, announced their support for the upcoming developments. Binance also added that in case of any freshly forked coins, “Binance will evaluate the support for distribution and withdrawal of the forked tokens.”

Moreover, Tether and Circle are both happy to support ETH 2.0. Circle, the company behind USD Coin (USDC), said that “the switch could enhance scalability while slashing energy consumption.” However, it is unlikely that the two stablecoins will support any emerging PoW forks. Ultimately, with Ethereum’s (ETH) “The Merge” providing an eco-friendly maintenance solution, many crypto companies, both established and fresh, can benefit from the eagerly anticipated innovation.

On the Flipside

Why You Should Care

The upcoming ETH 2.0 will play a crucial role in the future of cryptocurrency.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Tadas Klimasevskis

Tadas Klimaševskis is a Lithuanian journalist at DailyCoin, specializing in covering the lighter side of the crypto industry such as memecoins and pop culture in the metaverse. He has experience as a music artist, English language teacher, and freelance writer, and uses his creative writing skills to summarize valuable information in his work. He is also a strong believer in the potential of blockchain and spends his free time listening to music, traveling, and watching basketball games.