Coinbase’s debit card was launched earlier this year in April, with its debut in the United Kingdom. The card was issued by PaySaf Financial Services Limited, which is regulated by the Financial Services Authority as a certified issuer of electronic money and payment instruments.
The idea was to allow people to spend their cryptocurrencies easily and directly from their Coinbase accounts. The card grants its holders access to cryptocurrencies like Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC), so they can pay at any store or merchant, accepting Visa.
According to Zeeshan Feroz, CEO of Coinbase UK, the ultimate goal of the card is to make digital currency payments as easy and seamless as cash payments. The payments made in cryptocurrency through the card will be instantly converted to fiat currency, at a certain cost though. The idea seems to be hitting it off really well with crypto proponents as the company crossed the initial 1,000 cards, which it offered to users for free on its launch in UK, waiving the card issuance fee of £4.95 ($6.48).
According to the latest reports, the Coinbase card will be available in six European countries, which include Spain, Germany, France, Italy, Ireland and the Netherlands. Furthermore, the card is available as a physical contactless card that can be used to withdraw cash from ATMs like a traditional ATM card.
The exchange also launched an application specifically for the card that is available on both Android and iOS, giving users the luxury to decide if they want to make payments in the mobile app. The app also offers instant receipts, transaction summaries and spending categories.
Coinbase isn’t the only digital exchange aiming to streamline the spending of cryptocurrencies in everyday life; various startups, banks and tech companies are focusing on the accessibility of crypto payments. In fact, Binance, one of the world’s largest cryptocurrency exchanges, is also exploring similar grounds.
Only earlier this year, Binance struck a partnership with the Israel-based payment processing firm, Simplex, to offer debit and credit card payments with cryptocurrency. The exchange is supporting credit card purchase for Bitcoin (BTC), Ether (ETH), Litecoin (LTC) and Ripple (XRP). These cryptos can be traded against up to 151 other tokens offered by the exchange. According to Binance’s CEO Changpenh Zhao:
The crypto industry is still in its early stages and most of the world’s money is still in fiat. Building fiat gateways is what we need now to grow the ecosystem, increase adoption and introduce crypto to more users.
Simplex, like PaySaf, charges an amount for the transactions, which is 3.5 percent of a transaction with a $10 minimum (flat fee). Moreover, the daily limit is $20,000 per user, while the monthly max is $50,000 per user.
Crypto Card’s Potential
As major exchanges venture further in this crypto card endeavor, it is safe to assume that they are most likely to play an important role in the crypto ecosystem. Undoubtedly, using cryptocurrencies in day-to-day transactions is difficult; in fact integration in the real world happens to be one of the biggest challenge that cryptocurrecies face.
Another issue cryptocurrency face is that a vast a majority of people don’t consider it as real money, mostly because they can’t easily spend it anywhere anytime as in the case of cash. The question then becomes: can crypto cards help solve these issues?
While they are great stepping stone for crypto mass adoption owing to their efficient solution for crypto-to-fiat spending, crypto cards aren’t perfect nor are they ideal. For starters, the element of privacy, which is one of the most important features in bitcoin and other cryptos, is simply impossible when it comes to the cards.
Secondly, crypto debit card companies are scarce because of the complexities that comes with operating a crypto-fiat business like regulatory requirements, the changing stance of Visa and Mastercard, and Bitcoin’s Lightning Network. All of which could give crypto cards a tough time in the near future.
However, at the end of the day it is a tremendous leap towards changing the perception of cryptocurrencies and bitcoin to be specific, from traded asset to valid real-world currency.