The crypto world has continued to grow each passing day, and the industry is closer to global crypto adoption judging from the events and developments of the last week of April.
Crypto Adoption: Russia Opens Four Regions
The Russian Federation has indicated that it is opening four regions in the country to test cryptocurrency. This is a significant milestone towards crypto adoption around the world. The Federation will test crypto innovations in regions that are not under the purview of the current regulations.
A bill drafted by the Economy Ministry of Russia indicates that the Federation will allow regulatory sandboxes to establish a base in these areas. Firms and companies will now experiment with cryptos in the four regions without violating any federal legislation even though crypto assets are yet to be regulated in the country.
An advisor to the Russian President, Kirill Kabanov, stated that for years cryptos have been circulating unregulated in most countries, including Russia. He added that the use of regulatory sandboxes will be vital as test grounds for standards that can be applied in the industry.
Crypto Adoption: Finland Joins the List
Besides Russia, the President of Finland has also approved legislation proposed by the finance ministry that aims to regulate crypto service providers. The proposal puts all crypto services, including issuers, exchanges, and custodian wallet providers, under one law. The Fin-FSA stated that all crypto service providers in the country are required to register with the Financial Supervisory Authority of Finland in line with the legal requirements of the legislation.
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The proposed Act on Virtual Currency Providers is expected to be effective from May 1, 2019. In accordance with the new act, the Finnish Financial Supervisory Authority will now act as both the registration and regulatory authority for crypto service providers.
Beginning May 1, only crypto providers that comply with the statutory requirements of the Act will be allowed to continue activities in the country.
In the news making headlines in the cryptocurrency industry, Harvard University Endowment has made an investment in the crypto token sale of Blockstack.
Blockstack Offering 95.83 million Crypto Tokens
A filing made with the US Securities Exchange Commission listed designees affiliated to the Havard Management Company including Charlie Saravia, Rodolfo Gonzalez, and Zavain Dar who have been participating in the purchase of 95.8 million Blockstack tokens, worth $11.5 million. Although it’s not clear how much the Harvard University Endowment has purchased, it is, however, the first time a major endowment has invested in cryptocurrency.
In a tweet, Anthony Pompliano of Morgan Creek Digital indicated that Havard Endowment had directly invested $5 million to $10 million in the Blockstack token sale.
This investment from a leading university is going viral, and it’s a move that will hopefully encourage other institutional investors to invest in crypto tokens as well. The attitude is building up, and this will encourage investors to try small crypto tokens such as TCAT tokens.
Institutional Investors Seeking Regulated Custodians
Institutional investors have been hesitant about getting involved in the crypto market and with major assets such as Bitcoin, the reason being crypto’s lack of regulations. Even when Bitcoin was on a bullish run in 2017, achieving a price of $20,000, there were no regulated investment channels or custodial solutions that could encourage the institution to invest in crypto. In 2018, however, the trend began to change, and institutional investors have slowly started dripping their toes in the crypto waters.
Pantera Capital CEO, Dan Morehead, indicated that the crypto industry has been empowered with the necessary infrastructure and it can now handle large money from institutions. He added that institutions are concerned about having a well-regulated custodian, something that the crypto industry has yet to attain.
Blockstack CEO, Muneed Ali, stated that once the offering gets approved, it will be the first-ever SEC-qualified crypto token of its kind. He adds that proceeds from the offering will be put in the development of their decentralized app ecosystem.
Toronto/New York: One of Canada’s largest cryptocurrency exchanges has been granted bankruptcy protection after its 30-year old founder died unexpectedly in India, taking with him passwords of tens of thousands of customers who are unable to access USD 145 million in funds.
Quadriga said it was unable to gain access to Canadian dollar 190 million (USD 145 million) of bitcoin and other digital assets after Gerald Cotten, its CEO and co-founder, died in December.
He died of complications arising from Crohn’s Disease, an inflammatory bowel ailment, while volunteering at an orphanage in India.
Many of the digital currencies held by Quadriga are stored offline in accounts known as “cold wallets,” a way of protecting them from hackers. Cotten is the only person with access to the wallets, according to the company.
Cotten’s sudden death has plunged Quadriga into crisis and left it struggling to figure out how to refund more than 100,000 of its users, CNN reported.
On Tuesday, the Vancouver-based company said it was granted creditor protection in the Nova Scotia Supreme Court in British Columbia as it tries to sort out its financial mess.
Cotten’s widow, Jennifer Robertson, described people posting inaccurate speculation on social media about “whether he is really dead.”
“For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets,” Quadriga said in a statement.
“Unfortunately, these efforts have not been successful.” Robertson said that the laptop that Cotten used to run the currency exchange is encrypted, according to a copy of her affidavit posted online by cryptocurrency news site CoinDesk.
“I do not know the password or recovery key,” she said. “Despite repeated and diligent searches, I have not been able to find them written down anywhere,” she said.
The company has hired tech experts in an attempt to hack into Cotten’s laptop and other devices to retrieve the missing cryptocurrencies, but Robertson warned that at least some of them “may be lost.”
Quadriga, which is based in Vancouver, also owes about 70 million Canadian dollars (USD 53 million) in cash that it is unable to pay back, she said, citing difficulties accessing funds through the traditional banking system.
The Nova Scotia court appointed financial services firm Ernst & Young as an independent monitor that will oversee Quadriga’s efforts to resolve its financial problems.
The exchange, launched in December 2013, allowed users to deposit cash or cryptocurrency through its online trading platform, storing the digital coins on blockchain ledgers that are accessible only by an immutable alphanumeric code.
The company had 363,000 registered users, of which 92,000 have account balances owing to them in cash or cryptocurrencies, Bloomberg reported, quoting court filings. Cotten was the sole officer and director.
The Canadian High Commission in New Delhi told CNN that it was aware of Cotten’s death on December 9 and had “provided consular assistance,” but declined to reveal further details.
Elvis Cavalic of Calgary said that he bought a few hundred dollars of bitcoin using Quadriga’s platform.
When he tried to withdraw 15,000 dollars in his account in October, he could not.
“This is a tough lesson learned. I would probably avoid [cryptocurrency] in the future,” Cavalic was quoted as saying by the Canadian Broadcasting Corporation (CBC).
‘”They’ve left us completely in the dark. I’m kind of preparing for the worst,” Cavalic said.
The CBC reached out to lawyers for CIBC and Robertson for comment but did not receive a response by deadline.
While the case is unusual, it is not the first time the cryptocurrency industry has been hit by security concerns. Hundreds of millions of dollars’ worth of digital currencies have been stolen by hackers over the past few years.
In India, the Reserve Bank of India had banned the use of virtual currencies and informed the Supreme Court that allowing dealings in cryptocurrencies like Bitcoins would encourage illegal transactions.
The spectacular boom and bust in the prices of bitcoin and other cryptocurrencies have presented a quandary for governments around the world, which have taken differing approaches in trying to regulate their use.
Over the last month, the cryptocurrency market was on a hot streak, rising about 38% as investors piled into crypto assets such as Bitcoin and other popular alternatives like Litecoin, Ripple’s XRP, Ethereum, Bitcoin Cash, and EOS.
Crypto Market Capitalization Hits New All-Time High
At the beginning of the month, Bitcoin (BTC) price surged, taking analysts and traders by surprise as to what might have caused the sudden increase in price. However, analysts are unsure whether the cryptocurrencies will hold their recent gains. But considering Bitcoin has managed to maintain the price above $5,000, it shows signs of strength that the growth will continue.
This week the crypto market capitalization of Bitcoin and another 2,000 cryptocurrencies hit $186 billion, an all-time high for this year. Apparently, Bitcoin makes up almost half of the crypto market capitalization, with over a $90 billion market cap. Crypto analysts have labeled the sudden rally as the ‘Altseason’ because of the double-digit gain made by the smaller cryptocurrencies.
Bitcoin will Exceed $20,000 Price in a Few Years
The recent rally has been seen by industry players as good news, and it is a result of various developments in the crypto industry. This week the price of cryptocurrencies continued to grow following the launch of the Coinbase crypto card in the UK. Also, most of the major cryptos maintained their strong positions because of bullish comments from analysts and industry watchers, which caused a surge in sentiments allowing the coins to maintain the high prices.
Brian Kelly of BKCM investment management firm stated that the price of Bitcoin will, in the next few years, exceed the 2017 all-time high of $20,000. He added that the growth of crypto networks and institutional adoption of cryptocurrencies will continue to push the price of cryptocurrencies higher in the coming years.
eToro market analyst, Mato Greenspan indicated that there was a step down in the crypto market after a breakout week. He added that failure to go up demonstrates the present appetite, but it does not mean that growth will decline.
Samsung is not the only one South Korean giant that has blockchain-related news to share. Increasingly blockchain and crypto-keen South Korean conglomerates are striking partnership deals with domestic fintech companies as they look to fast-track their moves into the sector.
As reported, perhaps the biggest South Korean conglomerate of them all, Samsung, just confirmed that Samsung Electronics’ new flagship smartphone will indeed feature a crypto wallet.
The move comes as a major business model development for Samsung, which had thus far channeled its blockchain-related operations almost exclusively through its IT services arm, Samsung SDS.
The South Korean economy is dominated by chaebol companies, family-run business groups with billion-dollar assets and numerous affiliate companies. Despite the government’s apparently standoffish stance toward cryptocurrency businesses (contrasting starkly with its perceived fervor for all things blockchain-related), chaebol companies are growing increasingly keen to join the fintech fray, with the likes of Hyundai, KT and LG already firmly committed to developing blockchain and/or cryptocurrency business units.
In recent weeks, yet more mega-companies have signaled their intent to join in.
And per Fn News, companies like Kolon, Hanwha and SK are teaming up with existing blockchain startups as part of a strategy aimed at boosting their IT capabilities quickly so they can commercialize products faster.
Telecoms giant SK is working with Haechi Labs on “a smart contract platform based on blockchain technology.” SK wants to commercialize its new product by the end of June this year. The company last year revealed plans for an initial coin offering consultancy and other blockchain-related businesses.
Hanwha is keen to tie in its Galleria shopping and e-commerce franchise with Terra, a blockchain startup that specializes in online banking solutions – potentially allowing customers the ability to make blockchain-powered electronic transactions. The company last year announced its plans to create blockchain-powered insurance solutions.
And blockchain’s newest South Korean player, Kolon, says its residential property subsidiary is working with a company named Coinduck on a project that could enable it to allow tenants to pay rental fees in digital tokens such as cryptocurrencies – with results of a joint pilot expected “by the end of February.”
The venture capital arm of Pennsylvania’s economic development office is tokenizing one of its funds.
Ben Franklin Technology Partners of Southeastern Pennsylvania, one of four regional outposts formed by the Pennsylvania Department of Community and Economic Development in 1982, launched the Global Opportunity Philadelphia Fund, or GO Philly Fund, in February with $15 million committed.
Unlike Ben Franklin, which receives funds from the Commonwealth of Pennsylvania and is restricted to investing in the companies based in the Greater Philadelphia area, GO Philly can raise funds and invest globally, but will focus primarily on the Philly area-based companies, Scott Nissenbaum, Ben Franklin’s chief investment officer and a managing partner of GO Philly, told CoinDesk.
Working with the California-based token platform Securitize, GO Philly is looking to raise another $35 million by selling GO Philly Fund tokens to accredited investors.
“GO Philly Fund has been a trailblazer, not only in the blockchain space, but also as an impact fund,” Securitize CEO and co-founder Carlos Domingo told CoinDesk via a spokesperson. “We are proud to be partnering with them as their technology provider.”
Built on top of the ethereum blockchain, the GO Philly Token will be available for purchase by accredited investors at $0.50 apiece, in dollars, bitcoin or ether – but the minimum buy-in is $250,000.
Big investors first
The $50 million fund was created in partnership with a publicly traded IT company, EPAM. GO Philly raised more than $15 million pre-launch: with $5 million from Ben Franklin, $5 million from EPAM and the rest from investment firms including Fulton Financial Corporation, SRI Capital and Provco Group.
These investors have already secured their bags of GO Philly tokens, with the first batch being sold on Feb. 7. Nissenbaum sees that early action as an assurance to new investors:
“There are so many question in this market about what’s real and what’s not. So we decided that we are going to bring big companies first, and then the rest of the entire globe can also buy in.”
GO Philly is expecting to sell 100 million tokens in total, including the portion already sold. The tokens will be “a digital representation of a limited partnership contract” and comply with the SEC’s Rule 506(c), Nissenbaum explained.
The token holders’ money will fund GO Philly’s efforts and earn them a profit if the supported startups flourish.
“All the value we will create in those companies will flow back to the token holders,” Nissenbaum said.
The advantage of the token model, he said, is that, if an investor wants to get out, it’s easier to sell a token than a limited partnership in a venture fund, given that GO Philly is going to create a secondary market for such tokens in the future – though the legal structure of that future entity is not yet disclosed.
However, the tokens won’t have the profit distribution functionality: instead of smart contracts, traditional bank transfers will deliver money to the owners of the digital securities. GO Philly also won’t hold crypto, even though it’s allowing investors to buy tokens with bitcoin and ether. The BTC and ETH will be immediately sold for cash, Nissenbaum said.
The Philly-area Ben Franklin invested $8.1 million into 51 startups in 2018, according to its annual report. Its total portfolio includes 227 companies leveraging $354 million in assets.
Securitize, a Coinbase-backed digital asset platform, recently announced the launch of a “one-stop shop” for various token-related services, with Coinbase Custody, OpenFinance, Rialto Trading and CBlock Capital as the first participants. Earlier the firm partnered with over-the-counter trading platform OTCXN.
A new filing with the U.S. Securities and Exchange Commission (SEC) shows that prominent venture fund Polychain had $591.5 million in assets under management at the end of March.
That’s down considerably since the firm’s August 2018 filing, which showed $967.8 million in assets under management. That’s a loss in value of $376.4 million.
The Wall Street Journal was the first to report that the company was no longer a billion-dollar operation.
Polychain is one of the most elite funds serving startups in the crypto industry. Founded by Olaf Carlson-Wee, the first employee of Coinbase, Polychain was among the earliest funds to invest in tokens rather than companies, as CoinDesk reported in 2016.
Part two of the most recent form describes the company as managing five funds: Polychain Master Fund, Polychain Master Fund II, Polychain Ventures, Dfinity Ecosystem Fund and Polychain Opportunities Fund I.
The document acknowledges significant risks in investing in crypto assets, writing:
“There is no assurance that digital assets will maintain their long-term value in terms of purchasing power in the future, or that acceptance of digital asset payments by mainstream retail merchants and commercial businesses will grow.”
Polychain did not reply to multiple requests for comment.
Enterprise-focused distributed ledger tech startup Digital Asset (DA) has landed another high-profile partner.
Announced Thursday, software virtualization giant VMware is integrating DA’s smart contract language into its own blockchain platform.
Further, VMware, a publicly traded company majority-owned by Dell Computer with more than 24,000 employees, will distribute the Digital Asset Modeling Language (DAML) with its VMware Blockchain platform directly to customers and through partners.
“DAML has been proven to be one of the few smart contract languages capable of modeling truly complex workflows at scale,” said Michael DiPetrillo, senior director of Blockchain at VMware, in a press release.
According to the companies, VMware Blockchain “is deployed in enterprises worldwide,” although further details weren’t provided.
Palo Alto, California-based VMware first revealed last August that it had developed an open-source blockchain designed to be both scalable and energy-efficient, known as Project Concord. In 2017, the firm sought a patent for a system that would use blockchain as part of a wider effort to boost the speed of data transfers. Its main business is providing cloud computing and platform virtualization services to companies.
The team-up is the latest in a string of announcements by New York-based Digital Asset, which is best known for its former CEO, JPMorgan alum Blythe Masters, and its multi-year contract to rebuild the Australian Securities Exchange’s aging CHESS system using DLT.
The startup recently open-sourced DAML and began working with the International Swaps and Derivatives Association (ISDA) to aid the Wall Street trade group’s effort to standardize data in complex financial contracts.
Consider yourself $14.1 million closer to buying your morning coffee with bitcoin.
New York-based payments startup Flexa just raised that amount in a private token sale involving Pantera Capital, 1kx, Nima Capital, Access Ventures and others.
The startup’s token, Flexacoin, is an ethereum-based ERC-20 token that will eventually be used by developers and businesses to stake value on Flexa’s network for merchant payment processing.
While Flexa co-founder Tyler Spalding declined to specify which merchants will accept bitcoin through this app, video tests show users buying Starbucks with it. (A Starbucks spokesperson told CoinDesk it is not working with Flexa.)
Spalding emphasized that Flexa is a business-to-business startup. Shoppers won’t need to hold or interact with Flexacoins at all. Flexa co-founder Trevor Filter said the details related to such governance and participation are still under development.
“The long-term goal is to give over the network to the merchants,” Filter added. “A sort of consortium of their own that allows them to accept crypto.”
Return of the token sale
Stepping back, Flexa is one of several companies to fundraise over the past six months through a private token sale without equity options. The predictions market startup Numerai announced a similar raise in March.
Access Ventures partner TJ Abood told CoinDesk his firm would have been interested in an equity offering as well. But as he’s also satisfied with Flexacoin because it allows his firm to participate in growing the network.
Businesses, from Access Ventures to merchants, can stake Flexacoin to the network and earn token rewards in a model comparable to proof-of-stake systems like Cosmos or Tezos. Flexa plans to launch a custodial crypto wallet app for its network, with users being able to spend crypto at point-of-sale with a type of QR code scan, similar to Apple Pay.
“We wanted the total Flexacoin supply to represent how much money can flow through the system right now,” Spalding told CoinDesk, adding that the network will launch on May 13. “All the participants earn money.”
Unlike Numerai’s token-fueled platform, Flexa’s network is not blockchain-based. Flexa’s approach to ethereum-compatibility, without complete reliance on that network, fit into Abood’s investment strategy.
“We subscribe to the idea of being a user-owner. Any company that we invest in, we immediately look to be a user,” Abood said. “Making use of the developer tools and all the system tools that exist to be able to deliver a superior product, that’s what drives us.”
On the other hand, 1kx cofounder Lasse Clausen told CoinDesk his firm also plans to become a staker because he believes for-profit tokenized networks are inherently better than traditional businesses. Speaking to Flexa’s symbiotic merchant acquisition strategy, Clausen added:
“If Flexa were a traditional for-profit venture, how would merchants be able to trust them that they won’t end up raising fees once they have reached enough network effects?”
Bridges not blocks
Instead of building a blockchain-based network, Spalding described Flexa’s protocol as an “elegant pipe” that processes payments from various cryptocurrency networks, including bitcoin, ethereum, bitcoin cash and litecoin, to the merchant’s own payment processing system for direct bank transfers.
“We wanted to build essentially the Stripe for these type of transactions,” Filter said.
Abood said this merchant-oriented structure could entice mainstream brands that are crypto-curious by offering the ability to accept bitcoin without risk. According to Spalding, Flexa will partner with exchange platforms for liquidity on the back-end. Plus, the Flexacoin collateral could be used to compensate if there’s an issue with blockchain settlement.
“Flexa plays a critical role in blockchain adoption at-large because it is bridging this digital payments landscape into a brick-and-mortar setting,” Abood said. “It’s opening up the idea of spending cryptocurrency to a much broader audience.”
Filter described the Flexa protocol as bolting merchant’s traditional infrastructure to a crypto-friendly bridge, rather than relying on debit cards or credit cards. Since the process uses crypto wallets, there’s no personal information exposed the way a credit card payment would.
“I don’t think that blockchains are good for many things,” Spalding added. “But, they are amazingly powerful for fraud-free payments.”
In the future, Flexa plans to add support for various exchange-issued stablecoins and other crypto assets. Until then, the focus is on partnering with exchanges and merchants to make custom on-and-off ramps via the Flexa protocol.
“A driving source in [mainstream] adoption will be the availability to accept cryptocurrency and that’s a merchant decision,” Abood concluded.
Bithumb, South Korea’s largest cryptocurrency exchange, has posted a net loss of 205.5 billion won ($180 million) for 2018.
CoinDesk Korea reported the news on Thursday, saying that the loss was mainly due to a sharp decline in the cryptocurrency market last year, though the company’s operator BTCKorea also cited infrastructure investments and labor costs as factors.
The figure marks a big swing into the red for Bithumb, having recorded a net profit of 534.9 billion won ($469 million) in 2017.
The exchange’s revenues, on the other hand, grew around 17.5 percent to 391.7 billion won ($343.4 million) in 2018, compared to 333.4 billion won ($292.3 million) the year prior.
The figures also show that the exchange’s operating profit declined 3.4 percent to 256.1 billion won ($224.5 million) last year from 265.1 billion won ($232.5 million) in 2017.
Meanwhile, operating expenses rose from 68.3 billion won ($59.8 million) to 135.6 billion won ($119 million), while non-operating expenses increased sharply from 4.1 billion ($3.6 million) won to 381.9 billion won ($334.8 million).
Bithumb has been going through some tough times. Just two weeks ago, the exchange suffered its latest hack, losing around $13 million in the EOS cryptocurrency and about $6.2 million in XRP. Last year, Bithumb was also hacked for some $30 million-worth of cryptocurrencies, but later claimed to have retrieved $14 million-worth of the hacked funds.
Since the latest theft, Bithumb has disclosed that it holds all customers’s assets in cold (offline) wallets to prevent losses through such attacks.
Amid its financial issues, Bithumb, said last month that it plans to cut its staffing levels by up to 50 percent, from 310 employees to around 150.
LGO Markets, a new bitcoin exchange for institutional traders, has revealed more details about its unorthodox approach to custody, including a forthcoming optional hardware wallet.
Launched in March, New York-based LGO bills itself as a one-of-a-kind exchange that will allow clients to control their coins instead of putting them in the exchange’s wallet. The idea is that clients open a multi-signature wallet with LGO that has three keys, two of which are needed to send a transaction: the client controls one key, LGO the second one and the clearing service provider Altcoinomy has the third.
Now, LGO is getting ready to release its own hardware wallet that clients can choose for storage of these keys, the exchange’s CEO, Hugo Renaudin, told CoinDesk.
The device, basically a plastic card with an embedded microchip, will become available sometime in the second quarter.
“All keys are created and stored in the smart cards, which means that they cannot be retrieved by an attacker,” Renaudin said, explaining how the hardware wallet would work. “LGO’s and Altcoinomy’s keys are linked to a computer script stored in the same respective smart card, which limits their usage to the signature of digital asset transactions authenticated by the client.”
Alternatively, LGO announced Tuesday that it has partnered with crypto storage specialist BitGo, which will offer the exchange’s clients custody through its South Dakota-regulated trust company as well as multi-sig wallet services.
Further, beginning this month BitGo will support LGO’s native token, also named LGO, which was sold in an initial coin offering (ICO) in February 2018 and will eventually be used for paying trading fees at the exchange.
“Both BitGo and LGO Markets are committed to the needs of institutional investors,” Mike Belshe, CEO of BitGo, said in LGO’s press release. “Our vision is aligned as both companies believe strongly in decentralized cryptocurrency markets where exchanges do not act as their own custodians.”
Social media giant Facebook is said to be seeking to raise as much as a billion dollars in outside funding for its cryptocurrency project.
Nathaniel Popper, a technology reporter at The New York Times, tweeted Monday that sources have said Facebook is targeting “big sums – as much as $1b” from venture capitalists to support the stablecoin effort. The company would use the funds as collateral to back the token, one person apparently told the journalist.
It must be stressed that, at this stage, the comments have not been confirmed by Facebook or any potential investors.
Facebook has been developing its own stablecoin for money transfers over WhatsApp, as revealed last December. The stablecoin may be pegged to a “basket of foreign currencies held in bank accounts,” Popper’s further tweeted.
Facebook has also been planning to list its stablecoin on cryptocurrency exchanges, telling platforms in February that it expects to get the product out in the first half of 2019.
While Facebook is far from short of cash, involving outside investors in the stablecoin project could help Facebook present the cryptocurrency project as “more decentralized and less controlled” by itself, Popper’s sources suggested. The company had $44 billion in cash and equivalents as of April 2018, according to CNBC.
Earlier this year, Barclays analyst Ross Sandler estimated that Facebook’s cryptocurrency project could yield anywhere from $3 billion to $19 billion in additional revenue by 2021.
The social media behemoth set up its blockchain team in May 2018, aiming to explore the emerging technology. Since then, the company has been looking to expand the team with new hires. It recently had over 20 open positions related to blockchain roles, including a lead commercial counsel.
Earlier this year, Facebook also hired staffers from Chain space, the startup behind a smart contracts platform.
Cryptocurrency exchange Coinbase has launched a Visa debit card allowing customers in the U.K. and EU to spend their cryptocurrencies directly from their Coinbase accounts.
The San Francisco-based firm announced the news in a blog post on Wednesday, saying that with the “Coinbase Card,” customers will be able to spend their bitcoin (BTC), ether (ETH), litecoin (LTC) and other cryptocurrencies “as effortlessly as the money in their bank.”
The exchange said it will “instantly” convert cryptocurrency to fiat currency, such as the British pound (GBP), when customers complete a transaction using the debit card.
The card supports all crypto assets available to buy and sell on the Coinbase platform, and customers can use them to pay for everyday purchases, such as a meal or booking tickets, according to the announcement.
With previously available products of this type, customers had to pre-load a specified amount of cryptocurrency onto the card in order to spend, Coinbase said.
The exchange has also launched an app for the card on both Android and iOS platforms, enabling customers to select which cryptocurrency wallet they will use to fund their spending. The app also offers “instant” receipts, transaction summaries and spending categories.
For the first 1,000 customers, Coinbase said it will waive the card issuance fee of £4.95 ($6.48).
PaySafe, a U.K. payment processor, is the issuer of the cards, a Coinbase spokesperson told CoinDesk.
In a similar development last month, banking startup 2gether said it was launching a prepaid Visa debit card that allows users to spend cryptocurrencies. With the 2gether card, customers will be able to pay with either euros or any of the following seven cryptocurrencies: BTC, ETH, XRP, bitcoin cash (BCH), EOS, Stellar (XLM) and litecoin (LTC).