Why Ethereum Transactions on Coinbase Will Be Paused During “The Merge”

Ethereum will switch from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) consensus in about a month. This “Merge” event, which has a potential date range of September 15–16, will wrap off a six-year exploration of the new consensus algorithm and blockchain.

The event is being prepared for by users, exchange platforms, miners, and developers. Recently, major cryptocurrency trading site Coinbase published an official statement detailing its preparations for the Ethereum “Merge.”

The exchange will “temporarily” halt all Ethereum-based and ERC-20-compliant token transactions, including deposits and withdrawals. According to the company, this choice is a “precautionary step” for the consumers.

The cryptocurrency trading site advised customers to do the following when “The Merge” became inevitable across the Ethereum ecosystem but uncertainty erupted in the community:

Since there is no ETH2 token, we advise against sending your ETH to anybody in an effort to “upgrade to ETH2.” During this time, your assets will be safe and secure, and you won’t need to take any action to improve.

The site underlined the first point: customers would see an ETH2 ticker to represent staked ETH before “The Merge.” Once the switch to PoS is complete, this ticker will be obsolete since “there is no ETH2 token.”

Coinbase will be able to “verify that the change has been effectively reflected by our systems” and “mitigate any possible dangers to the users’ money” thanks to the suspension of Ethereum transactions. Regarding the latter, Coinbase asserts that they do not anticipate problems with any further activities or other cryptocurrencies:

We do not anticipate that trading in ETH and ERC-20 tokens across our centralized trading products will be disrupted, nor do we anticipate that any other networks or currencies will be.

What Ethereum Users Can Expect From Coinbase During The Merge

According to the exchange platform, “The Merge” will enable Ethereum to advance along its plan toward adding additional improvements and enhancing scalability. Coinbase promised to update its customers on the situation with ETH and ERC-20 transactions during the event.

As a result, they urged its users to be alert for any possible frauds, which are certain to increase in number during “The Merge” and the dispute surrounding the various ETH tokens. According to the exchange, all user cash will be safe at this time.

The cryptocurrency exchange also issued a warning to consumers about prospective suppliers of other Ethereum-related services. Customers of Coinbase Prime and Exchange may have “temporary delays in custody withdrawal availability,” specifically According to the business,

(…) Years of effort by the Ethereum Foundation, independent researchers, client teams, infrastructure providers like Coinbase Cloud, and many more have culminated in the Merge. Our responsibility at Coinbase is to safeguard customer funds and facilitate a smooth transfer between Coinbase products.

At the time of writing, the price of ETH is $1,870, down 2% from the previous day.

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