In a push to make crypto easier to use for the general public, companies like Binance and Coinbase early in the year were racing to bring new features to users. This was in part to consolidate users from smaller exchanges and other crypto business that were shutting down due to the crypto winter. These new features were a strategy deployed by both these companies to attract the customers looking for a new service provider. The idea was that the new features will help these companies stand out in a crowded market. Binance came up with decentralized banks, credit debit card transactions and finally a crypto-to-fiat exchange in Europe, while Coinbase brought instant withdrawal of funds to Paypal. There was also another reason for such an aggressive push to bring in new customers who don’t have much technical know-how by making crypto easily accessible. We have to remember that crypto was going through a tough time and businesses were looking to scrap every last bit to survive. And now Coinbase has expanded the most important feature of all time, the crypto debit card, to six more countries.
Crypto debit card
The newest feature is a crypto debit card which allows people to spend their crypto in any shop, restaurant or business which accept Visa. The days when crypto could only be used by the technically literate is over. The technology and the infrastructure has come so far ahead from its beginning. Basically how the debit card works is like any other card issued by banks. We swipe the card and the payment is received in the shop owner’s bank account and an equal amount is debited from our account. Instead of the Dollars or Euros being debited from bank accounts, cryptocurrency will be debited from Coinbase accounts, which is equal to the amount to be paid to the business plus a conversion fee. The card was already available in the UK from mid-April onwards, but the company has announced on Wednesday that it will be expanding this service to Spain, Germany, France, Italy, Ireland, and the Netherlands, which will cover a population of 330 million+. As of now, the feature is only available for Bitcoin, Ethereum and Litecoin. The card also comes with many other features. The card comes in a mobile app and syncs directly with Coinbase accounts. It is also available as a physical contactless card that can be used to withdraw cash from ATMs.
An overnight transformation?
Although it might seem like one is paying the retailer in crypto, this is not exactly true. Coinbase converts the crypto into fiat before paying it to the retailer. Also, the huge volatility of crypto is a huge concern here. The cost of coffee might shoot up by 25 percent from morning to evening in crypto terms. Although many popular coins are not available for the service one can simply convert it using crypto-crypto pair to the available coins and then use it with the debit card. But although this is possible it takes a lot of effort and also costs more as each conversion has an exchange fee associated with it. The new rollout to six more countries is a huge step. Especially into a market like Europe which only generates 5 percent of the global crypto market. There are many challenges to a worldwide rollout like finding the right banking partners and also global regulatory climate, which makes a global rollout seem really far away and maybe it will never arrive.
This could be seen as a significant event in the industry, as until now one of the biggest difficulties facing crypto was the fact that there were barely a few institutions that accepted crypto in return for their services. The new crypto debit card completely changes the situation that exists now. Most businesses accept card transactions and a majority of them accept Visa. The end result of all of this is that anyone can use crypto to buy literally anything. The basis of any currency is the trust that if someone accepts it in return for any goods or services they provide, they can exchange the currency received for goods and services that they required. Thus, cryptocurrencies cannot technically be called currencies and this is exactly why crypto debit cards bring the industry a step closer to mainstream adoption.
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