The card uses a customer’s balance in Bitcoin or any other virtual currency and converts it into pounds or euro when paying in physical stores or online. It is the first crypto-based debit card to link directly with a cryptocurrency exchange in the UK and EU, as previously available crypto cards “required users to pre-load a specified amount of crypto onto their card, adding a point of friction to the process.”
Why is the launch of the card important and how will it affect the crypto industry?
Making cryptocurrency usage easier
Along with Coinbase’s Visa card, the crypto exchange is also launching an app which will allow users to choose which cryptocurrency wallets should be connected to their purchases. The app will also allow customers to receive instant receipts, transaction summaries and access to spending categories. The process of converting users’ cryptocurrency into fiat is quite simple – “crypto, equivalent to the amount spent, is liquidated immediately into fiat ensuring the correct value is captured at the time of the transaction. Funds are debited immediately from the customer’s account”, explained Zeeshan Feroz, Coinbase UK CEO.
Rolling out Coinbase’s Visa card means opening up cryptocurrency payments to a large swath of users who are eagerly anticipating mainstream acceptance of cryptocurrency payments for everyday purchases.
The card will be first available in the UK only, with the view to soon be introduced across all European markets in which Coinbase operates. “The UK is a great first market for the Coinbase card with its thriving FinTech ecosystem and consumer willingness to try new ideas. The Coinbase Card will initially be available in the UK with a view to going live, in the coming months”, said Feroz.
What does it mean for the industry?
Rolling out Coinbase’s Visa card means opening up cryptocurrency payments to a large swath of users who are eagerly anticipating mainstream acceptance of cryptocurrency payments for everyday purchases and it goes without saying that any route that allows users to spend crypto in traditional ways is great for the crypto industry. Niv Abramovich, VP of Product at Coti, believes that utilising the card scheme will increase the popularity of cryptocurrencies. “Making digital currencies more accessible to consumers together with the ability to spend cryptocurrency in the real world could be the next phase to mass adoption and mass market of building digital economies and using digital money”.
“Making digital currencies more accessible to consumers together with the ability to spend cryptocurrency in the real world could be the next phase to mass adoption and mass market of building digital economies and using digital money.”
However, Richard Dennis, Founder and Senior Cryptography Adviser at temtum points out that since a Bitcoin transaction takes at least 10 minutes to enter a block, and 60 minutes to be fully confirmed on the blockchain, the payment processes and exchanges involved are risky. “There is a real possibility that a transaction might fail for a number of reasons, and there is nothing that Coinbase would be able to do about it if it does”, he says. So while the new Coinbase card is a significant step forward to using cryptocurrencies as a medium of exchange for daily purchases, as was the original vision of Bitcoin, Dennis thinks that the current generation of blockchain architecture is not able to completely remove the risk from the payment providers.
Steven Parker, CEO of Crypterium, on the other hand, admits that the card is a good ‘starting point’, however, he argues that the solution is still quite narrow because it will be only available to customers in the UK. “There’s no doubt that crypto debit cards are one of the easiest ways to bridge the gap between the crypto and traditional economies, enabling holders to spend digital assets with the same ease as fiat currencies. Big players like Coinbase play a vital role in spreading the word about this product, but ultimately, companies with more inclusive propositions will conquer the market”, concludes Parker.