Google said on Tuesday that it would make use of Coinbase Global Inc. (COIN) services to let some customers pay for cloud services with cryptocurrencies beginning early in 2023, while Coinbase said that it would make use of Google's cloud infrastructure.
Following the news, Coinbase shares were up as much as 8.4 percent in Tuesday's trading, although overall the stock is down 70 percent for most of the year.
The deal, which was announced at Google's Cloud Next conference, will help in getting cutting-edge companies to Google in a highly competitive, fast-growing market, where Google's main rivals do not make use of payment with digital currencies.
The cloud business will open up more avenues for Google parent Alphabet other than advertising, and it now accounts for 9 percent of revenue, up from less than 6 percent from three years.
Coinbase gets most of its revenues from retail deals and it will move data-related applications to Google from Amazon Web Services cloud, where it was based for so many years.
Talking to CNBC, Amit Zavery, vice president and general manager and head of platform at Google Cloud, said, "The Google Cloud Platform infrastructure service will initially accept cryptocurrency payments from a handful of customers in the Web3 world who want to pay with cryptocurrency, thanks to an integration with the Coinbase Commerce service."
With time, Google will make way for many more customers to pay through cryptocurrency, he added. Coinbase Commerce supports 10 currencies, including Bitcoin, Bitcoin Cash, Dogecoin, Ethereum and Litecoin. Bitcoin, Dogecoin and Ethereum prices have fallen more than 60 percent in the past year.
While the terms of the deal were not disclosed, similar to other Coinbase Commerce arrangements, the company will earn a percentage of transactions that go through it.Google is also exploring how it can use Coinbase Prime, a service that securely stores organizations' cryptocurrencies and allows them to execute trades. Zavery said Google will experiment and "see how we can participate" with managing cryptocurrency assets.
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