Visa has authorized Coinbase to issue Visa cards directly to customers.
In a first for the cryptocurrency industry, San Francisco-based exchange Coinbase has been granted status as a Visa principle member, it announced in a Feb. 19 blog post. This will allow it to originate Visa debit card accounts directly, rather than running accounts through a bank or payment processor.
Coinbase positioned that announcement as a “significant milestone in the mainstream adoption of crypto as a genuine utility.” It will be the “first pure-play cryptocurrency company,” to do that, it added.
More significantly, directly issuing its own debit cards allows Coinbase to cut out an expensive middleman—the bank. That fits the broader goal of blockchain-based FinTech companies, which often seek to bypass traditional intermediaries to make financial transactions cheaper and faster.
“We plan to start originating cards later this year,” a company spokesperson told Modern Consensus.
But that likely won’t be available to U.S. customers. “We’re looking at the U.S. but there is no firm timeline right now,” he added.
Coinbase has offered customers in the U.K. and 28 European countries a Visa-branded debit card since last year. The Coinbase Card can be used to spend 10 cryptocurrencies, including bitcoin, ether, and XRP anywhere Visa is accepted, including in the U.S. But that card is actually issued by Paysafe Financial Services Limited, a payments processor.
More than half of Coinbase’s existing Coinbase Card holders use it regularly, the company said. U.K. customers use them the most, followed by Italy Spain, and France.
By allowing Coinbase to issue Visa cards, “this membership will enable us to offer more features for Coinbase Card customers, from additional services to support in more markets,” the company said in its blog post.