Coinbase pleasantly surprised its users by recently releasing the Coinbase card. The Coinbase card will do a good job of sealing the gaping hole that was left when Coinbase’s crypto debit card provider, Shift card, shut down earlier this year.
The Coinbase card which has first been launched in the UK will enable its users to seamlessly exchange crypto to GBP. The card will see users make withdrawals seamlessly, and instantly on ATMs or for payments in thousands of stores nationwide.
Coinbase’s new debit card will be issued by Paysafe, and can be managed via Coinbase’s card app that is linked to individual crypto user’s accounts. The Coinbase card app is designed to be both iOS, and Android compatible and allows users to seamlessly swap between digital wallets. The app supports various assets listed in the Coinbase platform, meaning that users can therefore shop using either their Eth or BTC.
The Coinbase app is not only brilliant for enabling transactions, the app can also help one receive receipts for payments and transactions summaries as well. The card is simply a gate way for crypto users, and holders to openly integrate with legacy financial market with as little friction as possible.
Card has huge critics though
To use the Coinbase debit card in the UK, some transaction fees will be levied, a price that is not common with the usual visa transactions of the domestic kind. The card issuing cost is $6.48 with an additional charge of $2.49 percent per purchase. If you dissect this, you will figure out that this adds up to 1 percent per purchase for transaction fees, and 1.49 percent for crypto to fiat conversion fees. To reverse such a transaction, the debit cardholder will also have to part with $26.19, while the spending limit is capped at a daily $13,092.
These transaction charges have not been well received, with skeptics describing them as exorbitant; and accused Coinbase of trying to milk profits from transactions. They advised users to ditch the card and rely on the internet instead. One Reddit user who is a big critic of the card reminded users that the whole essence of crypto was to eliminate the middleman, and according to the person, the Coinbase card represented the Middleman.
The card usage in the US will definitely be more expensive than in the UK, because of capital gains tax. Simple transactions such as purchasing one token with another, as well as the reception of mined tokens are taxable as well. Airdrops are also surprisingly taxed in the US. All these costs together with the Coinbase transaction costs may make the card too expensive to use in the US.
The launch of the Coinbase card has excited many, but may yet disappoint many who do the math on the costs if the cynics are to get more attention than they currently are. One such Cynic is Lex Sokolin formerly of Autonomous research who had this to say about the card;
“Riding the open loop networks of Visa and MasterCard is a faster way to market, but not a transformational one in terms of industry economics.”
Image Courtesy of ft.com
