Digital currency exchange Coinbase launched a debit card in the U.K. on Thursday to make it easier for customers to pay in stores and online with cryptocurrencies like bitcoin, ethereum and litecoin.
The Coinbase Card is a contactless Visa debit card that syncs directly with a user's Coinbase account. The card will be accepted at any retailer around the world that accepts, Coinbase U.K. CEO Zeeshan Feroz told CNBC in an interview in London. He said the card will give users the ability to spend and invest cryptocurrencies from one common platform.
"There's a real advantage in actually being able to deposit crypto and interact with crypto because the crypto ecosystem is so much more than the investment aspect," Feroz said.
Retailers themselves would not actually be taking payments in cryptocurrencies, Feroz said.
Instead, Coinbase charges users a small fee of about 2.5 percent to convert fiat money, such as the British pound, into a cryptocurrency, like ethereum.
Users can decide which crypto wallet they would like to use for the payment through a new Coinbase Card app, the company said. The amount of the selected cryptocurrency would then be withdrawn from a customer's Coinbase account.
"We've tried to keep the fees as competitive as possible," Feroz said.
Coinbase said it has an e-money license in the U.K. to enable the payments. Feroz added the company is also applying for a European e-money license and hopes to expand to other European countries by mid-April. It opened an office in Dublin last year as part of a contingency plan ahead of Brexit.
Many fintech companies are working on solutions to try to make crypto payments and trading more accessible. Revolut in the U.K. and Square in the U.S. offer crypto trading on their platforms. Facebook is reportedly developing a cryptocurrency for global payments to use through WhatsApp.
One of Coinbase's biggest rivals Binance, meanwhile, made a push of its own into debit and credit card payments via a partnership with fintech firm Simplex earlier this year.
Coinbase said it would give the first 1,000 cards away for free to U.K. customers who sign up on a waitlist. After that, each card will cost roughly 5 pounds ($6.60).
There are no monthly fees to keep the card open or to hold a Coinbase account, the company said. Customers will also be able to withdraw up to 200 pounds per month from ATMs using the card.