Coinbase is going to become a credit card issuer for crypto.
Say it ain’t so?
Yep it is. And according to Meltem Demirors, Chief Strategy Officer of CoinShares, this is part of a broader trend of bitcoin going mainstream.
“Coinbase is effectively the Chase bank of crypto – you can deposit your money, trade / exchange it, lend it, and borrow against it whether with this credit card or future offerings like crypto-collateral backed mortgages. However, become an issuer in a credit card network isn’t necessarily going to be a driver for adoption – but it will be a boon for people who have their assets in crypto, who can now access a wider variety of banking services,” Demirors said.
Today’s on-ramps and consumer experiences in crypto are complicated, expensive, and primarily built for speculators, traders, and investors. However, verified crypto users doubled in 2018 to 35MM, according to research done by Cambridge University. While this is impressive, we believe that the results would have been far higher if there were lower friction on-ramps for everyday consumers to participate without heavy regulatory burdens, waiting periods, and overwhelming and intimidating user experiences focused on trading. In fact, while only 8% of Americans own cryptocurrency, 25% would like to own some, and 50% would spend it on everyday purchases.
Coinr=Routes recently invested in Fold, which is part of a wave of companies focused on building on-ramps to support the next wave of bitcoin adoption: mainstream consumers. Fold enables anyone to spend and earn cryptocurrency on things they do every day – hailing a cab, shopping online, ordering a coffee, and more. Fold seamlessly integrates cryptocurrency rails with traditional payment rails, rewarding everyone with up to 20% crypto-back for spending cryptocurrency or USD online or offline with Fold at their favorite retailers.
“While Coinbase will allow people who have their capital in crypto to use their crypto assets to access credit, it’s only one part of what we believe will ultimately be a large ecosystem of companies serving both crypto holders and crypto enthusiasts in their payments and spending,” Demirors said. “As the number of cryptocurrency holders and those interested in accumulating it continues to grow 2x every year, companies like Coinbase and Fold will take an increasing share of these large market segments. They are developing compelling use cases and incentive mechanisms to onboard mainstream users into cryptocurrency will be their guide for where to earn and spend it.”