Coinbase Offers Crypto-fueled e-Gift Cards in Six Countries
Cryptocurrency exchange Coinbase announced today that is allowing customers in Australia and some European countries to use funds in their Coinbase accounts to purchase e-gift cards. The American exchange appears to be going after the Holy Grail of crypto: payment networks.
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Coinbase Indirectly Enabling Crypto Payments
There will be benefits like cash bonuses and zero Coinbase withdrawal fees for purchases of the e-gift cards, which are tied to specific companies like Uber, Nike, Tesco, Google Play, Ticketmaster, and many others. Coinbase is partnering with WeGift, which describes itself as a “platform which enables transactions of gift cards, for any brand, in any amount, anywhere in the world, in real-time.”
Coinbase explained its thinking in a blog post:
“Making crypto easier to use, trade and spend is a core part of our efforts to improve the customer experience. With the launch of e-gift cards, customers now have the option to spend their crypto balances, realising its value to buy tangible things or experiences.”
The program is currently only available in the U.K., Spain, France, Italy, the Netherlands, and Australia, though Coinbase plans to expand to more regions in the next three months. WeGift lists dozens of companies for whom gift cards can be bought, with bonuses ranging from one to nine percent.
The move by the rapidly expanding Coinbase, which operates in 33 countries, is a step towards integrating crypto into the real-world payment system. For some, having cryptocurrencies able to be used as a payment system is the ne plus ultra of the technology. After all, the bitcoin whitepaper was entitled “A Peer-to-Peer Electronic Cash System.”
Cash, Credit, or Crypto?
While the Coinbase-WeGift partnership doesn’t actually make crypto a method of payment, it does create links between it and the wider financial system. It isn’t the first attempt to do so, as prepaid crypto debit cards that are integrated into major payment networks like Visa have existed for years. The path for such hybrid systems hasn’t always been smooth, however.
In January, Visa canceled the membership of card issuer Wavecrest Holdings, Inc, which had made deals with several crypto debit card providers in Europe. This left companies like Shakepay, Bitpay, Bitwala, and Cryptopay having to cancel their services and refund customers.
Many other cryptocurrency projects are attempting to create a purely crypto payment system that relies on neither traditional banks nor payment providers. However, they have failed to achieve widespread adoption, particularly in countries with a mature financial system. This is largely due to the fact that payment systems work pretty well in developed countries and also because of challenges ranging from technological limitations — such as payment confirmation times — to legal ones, like the fact that in many countries, every crypto transaction has tax implications similar to the buying or selling of a financial security.
However, in countries with troubled or less developed financial systems, cryptocurrencies appear to be making inroads. In Venezuela, where the IMF recently said that hyperinflation could reach an annualized rate of one million percent by the end of 2018, Dash (DASH) has seen growing adoption. Joël Valenzuela, Public Outreach Director at Dash Force, an organization funded by the Dash project, told the press that that 522 store owners in Venezuela accept Dash as a form of payment.
There are other payment services which allow for crypto trading. The Cash App by payment processor Square allows for the purchase of bitcoin, as well as the ability to make peer-to-peer (P2P) payments. UK-based fintech startup Revolut also allows for crypto trading and P2P payments, as well as offering pre-paid debit cards.
Have your say. Will Coinbase’s e-gift cards help get crypto into mainstream use?
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