The approach is consistent with a consistent pattern among crypto firms to make it simpler for clients to utilize their crypto currency holdings to pay for tangible products and services.
Chuy Sheffield, Visa’s head of crypto, said “We feel that access is essential to the evolution of money transfer. We’re delighted to join with top cryptocurrency exchanges such as Blockchain.com to expand the ways in which customers may utilize cryptocurrency for daily purchases.”
Blockchain.com has already received 50,000 sign-ups for its reservation for its consumer account-linked debit card, which will first be rolled out to US clients with ambitions to spread to Europe by the start of 2023.
The firm’s co-founder and CEO Peter Smith told Yahoo Finance “It ultimately boils down to client desire. The debit card, and cards in particular, are at the front of our consumers’ wish lists for upcoming services.”
The rival exchange FTX stated earlier in October that it will extend its collaboration with Visa by distributing debit cards to 40 new nations, beginning with Latin America. Numerous big companies accept bitcoin as a payment instrument, notably AMC, Home Depot, Microsoft, Overstock, Virgin Airlines, Whole Foods, and El Salvador.
Visa currently handles cards issued by Coinbase, Binance, and several more businesses, for a total of more than 70 relationships with cryptocurrency firms. In the initial three months after receiving their card, BlockFi consumers spend a third higher than the typical US consumer, according to a research by the company.
BitPay, one among the top cryptocurrency processing providers, has completed 66,186 trades in the previous 30 days and 422,197 in the recent six months, per its website. This represents a negligible portion of total financial transactions. Visa reported handling 50.9 billion digital payments in the quarter ended September 30.
Considering their fluctuation in exchange rates and usability, the top US customers have exhibited little enthusiasm for cryptocurrencies, much alone their usage as a form of payment. Nevertheless, dollar-pegged stablecoins, which are available in a variety of risk profiles, may circumvent a portion of the volatility problem.
Governance and awareness programs may potentially be factors inhibiting US customers’ adoption of cryptocurrencies as payment methods. The results of a survey performed by the Crypto Council for Innovation in Washington, D.C., 52% of US voters indicated a preference for stronger cryptocurrency oversight, while 62% stated they don’t think much about cryptocurrency. Just 13%, somewhat fewer than those who own equities (16%), reported holding bitcoin.
The debit card issuers earn from the exchange charge paid by retailers. Visa reports that interchange costs for both debit and credit cards given out by companies with less than $10 million in assets, including Blockchain.com, may range up to 2.5% every transaction. Dan Dolev, a leading fintech analyst at Mizuho Securities, estimates that after Visa and any other affiliates, debit card firms may earn somewhere between 0.5% and 1.2%.
As per Coinmarketcap, the entire market cap of digital currencies has decreased by over 50% from $2.18 trillion at the start of January to $996 billion. Blockchain.com’s debit card is a response to this decline. Ever since Blockchain.com completed a $490 million series D financing round in March, valuing the company as among the biggest in the business, cryptos fell in the second quarter. F urthermore, the business loaned $270 million in cryptocurrency to the failing cryptocurrency hedge fund Three Arrows Capital, as stated in a court filing in Three Arrows’ bankruptcy case.
Smith acknowledges that some short-term income instability is expected for crypto firms, but he feels the latest card offering offers another simple application for bitcoin that consumers want.
Smith said “Consumers will need more accessibility to the cryptocurrency market in an environment where crypto is tremendously popular. Our consumers want not only the ability to invest and secure wealth in cryptocurrency, but also to use it for everyday purchasing.”