Coinbase Just Killed Seed Phrases—Here’s How Their Seedless Wallets Revolutionize Crypto Onboarding

Crypto's biggest UX headache just got decapitated.

Coinbase slashes friction with self-custody wallets that ditch 12-word recovery phrases—no more scribbling mnemonics on napkins or praying your dog doesn't eat your backup. The move targets mainstream adoption by mimicking Web2's one-click simplicity while preserving blockchain's decentralization ethos.

Behind the curtain: Multi-party computation (MPC) splits private keys into encrypted shards stored across user devices and Coinbase servers. Hack one piece? Useless without the others. Lose your phone? Account recovery via government ID checks—a tradeoff that'll make cypherpunks gag but grandparents applaud.

The irony? Banks spent decades building moats with KYC hurdles—now crypto's eating their lunch by streamlining identity checks *after* onboarding. Another brick in DeFi's relentless march toward replacing legacy finance's creaky plumbing.

What Coinbase’s embedded wallets change for apps

Coinbase launched its embedded wallets as a direct response to regulatory changes in the U.S. After the passage of the GENIUS and CLARITY Act, more companies are ready to experiment with integrating crypto into their services.

Still, crypto integrations remain relatively complex for both users and developers. For example, non-crypto-native platforms or websites looking to offer crypto payments typically rely on users who already know how to set up wallets.

With Coinbase’s toolkit, platforms can offer easier crypto onramps and payment options without having to hire their own blockchain developers. For this reason, Coinbase’s toolkit could help boost crypto adoption in areas where it hasn’t yet taken off.