Though officially awarded back in December 2019, Visa granting principal membership to Coinbase has only been revealed to the public today. This is the first time the payments giant has granted its principal membership to a crypto company. Through it, Coinbase will be able to issue debit cards that will allow its users to spend cryptocurrencies anywhere Visa is accepted.
More specifically, the membership was awarded to the U.K. subsidiary of Coinbase, which is based in Dublin. Thus, the debit card will not be available to U.S. residents, but will be in 29 countries, including Norway, Estonia, Germany, France, Italy, Norway, Sweden, and the U.K.
A total of 9 cryptocurrencies will be available on the card, including BTC, LTC, BAT, REP, ZRX, and XLM. Most importantly, usage of these cryptocurrencies for normal payments won’t be subject to a capital gains tax at the point of sale.
This advancement of the Coinbase business model will help people looking to spend their crypto to directly purchase goods and services, no longer needing to go through the long process of liquidation for fiat currency.
Zeeshan Feroz, CEO of CoinBase UK, commented on the collaboration with Visa:
“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.”
The membership will also allow Coinbase to issue debit cards to other crypto companies, though the company has said that it is not planning on taking advantage of that power anytime soon.
Although all of this is good news, the transaction fees that Coinbase currently charges will be a problem for the adoption of this new debit card. As it stands, $0.99 is charged for transactions less than a dollar. Fees increase as the size of the purchase increases.
Although some speculate that these fees might go down as a result of the Visa membership, it is by no means a certainty. Feroz said the the membership in question gives them more cost efficiency to work with, which should eventually translate to customers.
Coinbase previously issued a Visa card back in April 2019 through financial services firm Paysafe Group Holdings Ltd., but Feroz noted that the direct membership allows them to take more control of the program.