In a move that could lead to a dramatic increase in cryptocurrency usage in the United States, Coinbase recently announced that it had become the first purely cryptocurrency firm to join Visa. Coinbase has already issued VISA-branded debit cards in the UK and throughout Europe, and this new move could be the first step Coinbase needs to take in order to issue similar cards in the US.
Many credit and debit card users may not realize it, but Visa doesn’t actually issue any VISA-branded cards to consumers. Instead, it provides financial institutions with VISA-branded products that they can then use to issue VISA debit, credit, and pre-paid cards to their customers.
Coinbase’s membership in Visa means that it can now offer VISA-branded cards of its own. The way it has thus far worked in Europe is that Coinbase VISA cards have been linked to a cardholder’s cryptocurrency account, offering them the ability to use one of several different cryptocurrencies at the point of sale. The cardholder inserts the card at the point of sale terminal, the sale equivalent in cryptocurrency is deducted from the cardholder’s account, and the merchant is paid in the prevailing fiat currency. It makes paying with cryptocurrencies at retailers easy and painless for both consumers and retailers.
The acceptance of Coinbase into Visa is also a sign that cryptocurrencies continue to mature and are now accepted on par with fiat currencies, bank deposits, and other forms of payment. Now that Coinbase is part of Visa, it’s probably only a matter of time before US consumers will be able to apply for cryptocurrency payment cards, allowing them to make purchases with common cryptocurrencies such as Bitcoin, Litecoin, Ethereum, and XRP.
While cryptocurrencies have solidified their role as investment assets to grow wealth and hedge against economic crisis, their use as currencies for everyday transactions has stagnated. That all may change now, and usher in a new era with even greater mainstream acceptance of cryptocurrencies.