Top cryptocurrency company Coinbase plans to launch a Visa debit card in the UK that will let people spend cryptocurrency in shops and online.
Coinbase UK announced plans for the card on Thursday. It will be linked to Coinbase accounts, which let people buy and hold a range of cryptocurrencies such as bitcoin (BTC-GBP) and ethereum (ETH-GBP).
“We’ve invested nearly 12 months in this and we’re very excited about this,” Zeeshan Feroz, the UK CEO of Coinbase, told Yahoo Finance UK.
“I used my Litecoin balance the other day to do some shopping at Amazon and at Tesco. Bridging that gap between crypto and being able to spend is hugely exciting.”
The new debit card converts cryptocurrencies into pound or euros at the point of exchange, meaning retailers don’t need to sign up to anything to accept the cards.
The card costs £4.95, but the first 1,000 are being given away for free. Coinbase will charge a 2.49% fee for all transactions in the UK, a 2.69% fee for transactions in the EU, and a 5.49% fee for transactions in the rest of the world.
Feroz said Coinbase plans to roll out the card to the rest of the EU if it proves a success in the UK. The company has “several million” customers across the EU and the UK, he said.
‘You are looking at a transition’
The launch comes despite declining prices and activity in the cryptocurrency space. The total value of cryptocurrencies in circulation has fallen by over 75% since its peak in early 2018. Monthly cryptocurrency exchange volumes have also fallen by over 400% since their peak, according to data provider CryptoCompare.
Top reasons Brits bought cryptocurrency included a “fear of missing out” and hopes of getting rich quickly, according to a study by the UK’s Financial Conduct Authority earlier this year. The study suggests most people saw crypto as an investment opportunity, rather than as a new currency to use for purchases.
Feroz said the debit card was about helping crypto move into the next phase of its development.
“I think ultimately you are looking at a transition, whether it happens today or tomorrow, where crypto starts to become more than just an investment product,” he said.
“Having a debit card that’s tied into your crypto balances, it changes the perception of what your crypto represents. It turns it into a very liquid store of value that you can spend in the same way that you can spend pound sterling for example.”
Coinbase partnered with Visa and Paysafe on the debit card. Feroz said Visa were “incredibly positive” about the project.
“Generally speaking, there’s a certain shift in perceptions around crypto. The narrative has shifted. It’s easier to have these conversations,” he said.
“You’ve got to present a reasonable business case. We’re a regulated e-money institution. We look, feel, smell like any other financial institution for the fiat part of our business. That also offers some reassurance when you approach financial service partners.”
Coinbase is not the first company to launch a card letting people spend crypto in the UK. Startup Wirex offers a similar service, while foreign exchange card Revolut has added crypto as a cashback feature.
“Looking at the market, I think there’s definitely room in the market for us to offer something, particularly that’s aimed at our customers,” Feroz said.
San Francisco-headquartered Coinbase has around 30 million accounts globally and operates exchanges for both retail and professional crypto traders. Over $220bn has been traded across its platforms and the startup has raised over $500m from top investors including Andreessen Horowitz, Tiger Global Management, and Union Square Ventures. It has reportedly been valued at $8bn.