Plastic. A debit card to be precise. Coinbase, the digital wallet startup, is working through the red tape to bring your bitcoin wallet into the physical world.
Bitcoin is still unstable and gets attacked by critics on an ongoing basis. Yet, more and more people use it. It’s how they use it that troubles observers. Speculation.
It’s great news for proponents that more people use it than ever before. But, only 20 percent of Bitcoin transactions are people actually buying goods and services. Those are Coinbase numbers, but it’s not shocking. The other 80 percent? Speculators in search of the quick dollar.
How do you change that? Make it easier for people to spend versus speculating. And that’s how the Shift Card was born. It’s Coinbase’s attempt to push bitcoin back into the mainstream. Instead of the news stories in 2014 about the currencies wild gyrations, the company wants you to buy stuff.
Food. Electronics. Whatever. The VISA debit card will work anywhere a regular VISA would work. Online and off. I’m trying to think of a spot that doesn’t accept VISA and coming up blank.
What is VISA Doing?
While the card has VISA’s logo on it, it’s not issued by the company. Instead, the Coinbase card is offered through Shift, who has a relationship with VISA. Considering the goal of bitcoin is to ultimately democratize payments and get rid of transaction fees that VISA collects, it’s an interesting gamble by Shift.
The company for its part says they have VISA’s support in the project, but minds can change. Plus, it’s not like VISA isn’t making money off the card. As long as you use it and not direct bitcoin transactions, they get a piece of the pie.
A plausible scenario is VISA wants to see adoption rates, fee structures, etc. with none of the risks. The company can say it’s not them and toss the blame on Shift if regulators come knocking. Tons of upside, not a lot of risks.
Besides the encouraging of people to spend versus speculate, it removes the barrier to entry. You don’t need a bank account. Sync your wallet and you’re good to go.
Another benefit is it removes some of the stigma attached to Bitcoin. All too often it is associated with the Dark Web and the buying and selling of illicit drugs online.
Proponents have often pointed to the anonymity of bitcoin as a plus, but it has held the currency back from adoption. A debit card? Users will have to verify their identity. And that’s a good thing. It lends legitimacy to the digital currency, pulling some of it out of the shadows.
Coinbase Debit Card
How do you get it? For starters, it will only be in 25 states. It should be noted Coinbase has not explicitly gained approval from the 25 states but has told them it planned to offer the card.
That could be a stumbling block for the card. It will need regulatory approval. Coinbase is taking the approach of it’s easier to ask forgiveness than permission. With VISA’s logo sitting on the card, full approval could be easier.
Having identities attached to the cards makes the process even smoother.
To get a card, you have to pay the $10 issuance fee, which is also the cost for a replacement card. There’s no annual fee and the conversion from Bitcoin to USD is zero.
ATM withdrawals? In the United States, there is a $2.50 fee. International withdrawals are set at $3.50, and there is a 3% fee for international transactions.
Bitcoin’s Savior is Physical?
It makes for an intriguing storyline that bitcoin’s salvation from speculative hell could be physical. It prides itself on being digital, but for the mainstream? Sometimes a small step is needed before we accept the giant leap in payments.