- >Coinbase Set to Launch Crypto Credit Card in USA
Coinbase Set to Launch Crypto Credit Card in USA
Recently, Coinbase announced that its Coinbase Visa Card will soon be available to residents of the United States. The card is already available in Europe, but now Coinbase customers in the United States are able to join a waiting list in anticipation of the launch of the card in America. There are a number of different crypto debit cards already available on the market, but the Coinbase Card brings a level of trust and reliability in the cryptocurrency industry that is difficult for any other company in the space to match.
CryptoVantage Staff | Nov 12, 2020
Coinbase Card Rewards
The most obvious benefit of the Coinbase Card is going to be the fact that its attached to perhaps the most reputable bitcoin and cryptocurrency exchange in the world. However, the features available with this card go far beyond the reliability that comes with the Coinbase brand name.
For example, many crypto credit cards have been known to offer high cashback rewards for their customers, but these rewards are usually tied to schemes that involve cardholders being forced to purchase an altcoin and hold it in their crypto wallet for a predetermined period of time. While rewards are also available for Coinbase Card users, there is an added benefit in that there aren’t any strings attached to the rewards system. Everything about the cashback program is rather transparent, as users are able to get either 1% cashback rewards in bitcoin or 4% cashback in Stellar lumens.
Great Card for Users of USD Coin
One of the main drawbacks of the Coinbase Card is that it comes with high fees in terms of using the card to make cryptocurrency-backed purchases in the real world. Cardholders face a 2.49% fee for every transaction made with the card, which more than removes the bitcoin-denominated rewards for using the card in the first place.
There is, however, an exception made when a user is funding card purchases with USD Coin (USDC), which is a stablecoin that was development by Coinbase through a partnership with Circle. Coinbase Card users do not need to worry about transaction fees when they use USDC as the funding option for their purchases and ATM withdrawals. In other words, the best option for cardholders is going to be using USDC as the funding source and receiving rewards in Stellar lumens.
Tax Concerns Persist
One of the key issues that remains in terms of using cryptocurrencies for real-world purchases has to do with taxation. While it’s not the case in every country around the world, Americans who sell cryptocurrency or use cryptocurrency to purchase a good or service need to report capital gains on those transactions. This makes using bitcoin and other crypto assets rather cumbersome, as there is a large amount of extra work that must be completed just to make a simple purchase at a retail establishment.
Of course, these tax-related issues are less of a concern when a cardholder is using a stablecoin like USDC as the funding source for their card. After all, the point of USDC is for the price to be pegged to the U.S. dollar, so there should not be much to worry about there in terms of gains or losses of value over time.
Coinbase’s crypto debit card offering is not the first such product made available in the United States, but a large number of card issuers do tend to avoid this market due to a variety of regulatory concerns. That said, Bitpay, Uphold, and other cryptocurrency services companies have also released bitcoin debit cards in the United States. Even traditional fintech companies like Square and PayPal have cards that are able to act as cryptocurrency debit cards due to their cryptocurrency trading integrations.