Coinbase Faces Challenges with Apple Over NFT Transactions

Coinbase and Apple's NFT Policy Clash

Coinbase Global Inc has announced a significant change affecting users of Apple's iOS devices. Customers will no longer be able to send non-fungible tokens (NFTs) via the Coinbase Wallet on these devices. This decision stems from Apple's policy that demands gas fees for NFT transactions be processed through its In-App Purchase system, allowing Apple to take a 30% cut.

Incompatibility with Apple's System

Coinbase has expressed that even if they wanted to comply, Apple's proprietary system does not support cryptocurrency transactions, rendering the policy impossible to implement. The crypto exchange criticized Apple's policy, comparing it to an attempt to charge fees on open internet protocols.

Broader Implications of Apple's Fee Policy

Apple's 30% fee requirement has been a longstanding issue with various developers, including Spotify and Epic Games, who have accused Apple of leveraging its market position unfairly. This move affects consumer investment in NFTs and stifles innovation within the crypto ecosystem.

Challenges Facing Coinbase

This development arrives as Coinbase faces a turbulent period. The company's shares have plummeted by approximately 80% this year, and it has been forced to reduce its workforce to manage costs. Investor interest in cryptocurrencies has waned due to economic uncertainties and the recent collapse of competitor FTX, which has further pressured the industry.

Decline in NFT Demand

NFTs, unique digital assets on the blockchain, surged in popularity in 2021. However, recent months have seen a decline in demand due to the ongoing crypto winter, marked by increased interest rates and economic downturn concerns. This has prompted investors to shy away from riskier assets like cryptocurrencies.

Coinbase's situation with Apple highlights the broader challenges the crypto industry faces amid evolving market dynamics and regulatory landscapes.