In a drive to push further the cryptocurrency adoption and usage, cryptocurrency exchange Coinbase recently announced its new Visa debit card. This crypto-to-fiat debit card from Coinbase will allow users to spend the crypto tokens directly from their account.
This looks to be a sincere effort from the U.S.-based crypto trading giant to bring crypto adoption to the mainstream. Currently, Coinbase will release its Visa debit cards only to its customers based in the U.K, and later in EU. According to the announcement, the Coinbase Card will allow users to make in-store and online payments using Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and other crypto tokens.
While customers use the Coinbase Card to make any purchase, it instantly converts crypto to a fiat currently to complete the purchase. The official announcement notes:
“Customers can use their card in millions of locations around the world, making payments through contactless, Chip and PIN, as well as cash withdrawals from ATMs”.
Coinbase Card App
Besides launching the Visa debit card, Coinbase also launches the Coinbase Card App allowing customers to manage their spendings. The app allows customers to select the crypto wallets they will use to fund their Coinbase Card spendings. The Coinbase Card app also provides additional details like transaction summaries, instant receipts, spending categories, and much more.
The Coinbase Card App is available for download on the iOS and Android platforms. Once downloaded, customers can link it to their Coinbase accounts. Linking the Coinbase account will make customers crypto balance available to use through the Visa debit card. The company will then send the contactless Coinbase Card to the applicants.
The first 1000 people applying to avail the Coinbase Card will get the card issuance fee waiver of £4.95. Coinbase is certainly the first crypto exchange to allow customers to spend their wallet holding using a debit card.
Coinbase has joined hands with U.K.-based payments processor PaySafe Financial Services Limited to issue their new debit cards.
“Making crypto easier to use and spend is central to our mission to create a more open financial system,” said UK CEO at Coinbase, Zeeshan Feroz.
But unlike the normal Visa debit cards, the Coinbase Card comes with some fees attached to it. This includes the basic card issuance fee of £4.95 ($6.48). Also, each transaction will attract 2.49% charge (1.49% crypto conversion fee + 1% transaction fee). Moreover, Coinbase has also put a spending cap of £10,000 ($13,092) per day. Although Coinbase won’t charge any maintenance fee, reversing a transaction can cost £20 ($26.19).
Although Coinbase takes a pathbreaking step for cryptocurrency adoption, industry experts remain largely skeptical of this idea. Paul Veradittakit, a partner at Pantera said:
“I doubt there will be high demand or usage for it until people are incentivized to spending crypto, maybe more appealing in edging markets”.
Lex Sokolin, former director of Autonomous research said:
“There are several challenges. People are not used to buying sandwiches with Apple stock, and most crypto assets fall into a similar mental bucket. Riding the open loop networks of Visa and MasterCard is a faster way to market, but not a transformational one in terms of industry economics.”