According to an announcement made on February 19, Coinbase is now a principal member of Visa. The credit card giants officially granted Coinbase that status back in December 2019. However, the status was not disclosed to the public until today.
Moreover, the new membership status eliminates quite a significant and expensive middleman off the process of issuing debit cards. The cryptocurrency firm used to work with Paysafe to issue Coinbase cards. Following the new membership status, Coinbase can now stop relying on Paysafe and control a large stake of the card payment stack; to issue debit cards that allow users to spend their own bitcoin, ether, and XRP anywhere Visa is accepted.
In particular, principal membership has given Coinbase a significant advantage as it is the first cryptocurrency firm; with the power to issue debit cards to others, including other digital currency firms and even other traditional firms. Visa confirmed Coinbase’s new membership status but reiterated the company itself won’t accept digital currencies when the project launches later in the year.
Moving forward, Coinbase says it will not issue cards to others anytime soon. Nevertheless, the principal membership status presents Coinbase with a new significant income source. The membership status simplifies the process of spending digital currencies anywhere a Visa card is accepted. In addition, the principle membership establishes a platform for the likely explosion of BTC, ETH, XRP, and many other digital currencies. According to Zeeshan Feroz, CEO of Coinbase UK:
“Your Bitcoin holdings have never been liquid because you have to sell them, you have to go through a process, withdraw the money, and then spend it. It’s never been an instant, “Oh, I’ll buy this cup of coffee with bitcoin.” What the card is trying to change is the mindset that crypto is tucked away, takes two days to access, and can actually now be spent in real time.”
Coinbase Visa Debit Card not Available to U.S. Residents
Coinbase Visa cards will enable users to spend their cryptocurrency holdings in purchasing everyday items; regardless of whether the merchant accepts crypto. Moreover, the Coinbase card was initially launched in the U.K. but it is currently available in 29 other European nations. The Coinbase card can practically function anywhere in the world; however, it cannot be ordered by people outside the supported countries.
Nonetheless, the Coinbase Visa debit card will not be available to residents of the United States. The card that automates the conversion of cryptocurrency to the one preferred by the merchant; will go live later this year and will be managed by Coinbase’s U.K. subsidiary. It will be first issued to the 29 supported countries. The debit card will support nine cryptocurrencies which will include litecoin, bitcoin cash, Brave’s BAT, Augur’s REP, 0x’s ZRX, and Stellar’s lumen. The digital currencies will not be subject to capital gain taxes; since in Europe, users are not required to pay additional taxes; on price differences between when the crypto was purchased and sold like in the U.S.
More than half the number of users who initially ordered the Coinbase card is still active. The U.K hosts the majority of the users followed by Italy, Spain, and France, according to Coinbase. Bitcoin and the digital currencies may not or are yet to replace MasterCard and Visa, leaving traditional debit cards as the only viable alternative.