Coinbase Opened U.S. Waitlist for Visa Debit Card With Crypto Rewards

Coinbase opened a United States waitlist on October 28, 2020 for a Visa debit card designed to draw spending funds from customers’ Coinbase accounts. The company said eligible cardholders would be able to select supported cryptocurrency balances in its app, have the assets converted into U.S. dollars and use the resulting funds for purchases or ATM withdrawals wherever Visa debit cards were accepted.

The announcement mattered because it joined a cryptocurrency exchange, a regulated card issuer and a global payment network in a consumer product intended to make digital-asset balances usable through familiar payment infrastructure. It did not mean merchants would accept bitcoin or another cryptocurrency directly. Coinbase said conversion into dollars would occur before a purchase or withdrawal was completed.

What Coinbase announced

Coinbase said the first approved applicants could use a virtual card immediately and should receive a physical card within two weeks. The company did not provide an exact approval date, transaction-volume forecast or complete rollout schedule. Eligibility was limited to verified Coinbase customers in the United States, excluding Hawaii, and opening the waitlist was not equivalent to making the card immediately available to every eligible customer.

The card was to be issued by MetaBank, N.A., under a Visa U.S.A. license and powered by Marqeta. Coinbase said there would be no issuance fee, although cryptocurrency-conversion and other standard fees could apply. Contemporaneous reports from TechCrunch and The Block described a 2.49% conversion charge when spending non-USDC cryptocurrency and no corresponding conversion charge for USDC-funded purchases.

Those costs qualified the product’s utility. A customer selecting bitcoin, for example, was not transmitting bitcoin through Visa’s merchant network. Coinbase would sell or convert the selected balance, while the card system handled a dollar-denominated transaction. The product therefore functioned as an interface between crypto custody and conventional payments rather than as blockchain settlement at the point of sale.

Rewards changed the proposition

For the planned U.S. program, Coinbase offered a choice between rewards equal to 4% of eligible spending in Stellar lumens, identified by the ticker XLM, or 1% in bitcoin, identified by BTC. The percentages were reward rates, not investment returns, yields or forecasts of either asset’s price performance. Coinbase described the reward program as optional and initially limited it to U.S. customers.

The distinction between spending assets and receiving rewards was important. Customers could choose supported balances, including the dollar-linked USD Coin, as a funding source while separately selecting BTC or XLM as the reward. That structure allowed the card to market cryptocurrency accumulation without requiring every purchase to be funded by a volatile asset.

Coinbase already offered its card in nearly 30 countries, including the United Kingdom and European markets, by October 28. The development was therefore a U.S. expansion with a new rewards feature, not the first creation of Coinbase Card. Coinbase had also disclosed in February 2020 that it had become a Visa principal member, establishing an earlier institutional foundation for its card strategy.

A broader payments contest

The October 28 announcement followed PayPal’s October 21, 2020 disclosure that it planned to let U.S. customers buy, hold and sell selected cryptocurrencies and later use those balances as a funding source at 26 million merchants. Both models placed a payment intermediary between cryptocurrency holdings and merchants and contemplated fiat settlement rather than requiring stores to process blockchain transactions.

Coinbase supplied no event-day figures for waitlist registrations, approved accounts, card spending or reward redemptions. The verifiable development was consequently narrower than a completed national rollout: Coinbase had opened enrollment, disclosed the operating model and named the principal payment partners. Adoption, transaction economics and customer demand remained unmeasured on October 28, 2020.