Marqeta Works With Coinbase on Cards Backed by Stablecoins – Digital Transactions
The card-issuing platform Marqeta said early Friday it will work with cryptocurrency exchange Coinbase to issue payment cards that businesses can offer to customers, who can use the cards to tap into their stablecoin balances. At least for the time being, the program is aimed at what Marqeta calls “enterprise customers” that use its card-issuing platform.
As with many cryptocurrency-based programs that have emerged so far, the latest venture is geared to simplify the process of spending stablecoins by relying on the familiarity of a payment card. In the background, Coinbase’s technology will take care of custody of stablecoin balances and convert digital assets into fiat money. The company’s blockchain, Base, will handle settlement, according to Marqeta’s announcement. Marqeta will run issuance and payment processing, according to its announcement.
Both partners are expecting heightened volume, given the program’s focus on large businesses. “Coinbase brings scale and breadth of infrastructure to provide for the needs of our enterprise customers,” says Anthony Peculic, Marqeta’s chief strategy officer, in a statement.
The key to this latest venture between Marqeta and Coinbase will be ease of use, observers argue. “On the one side this [collaboration] is fully expected, as technologies like Marqeta try to lessen the friction of a stablecoin purchase,” notes Cliff Gray, principal at Gray Consulting Ventures, in an email message. “Because that, after all, is the real battle versus Visa. They need me to think it’s easier to whip out my Marqueta card than my Visa. The longstanding challenge at the merchant is the investment required to accept such payment methods. Not always easier said than done.”
Some observers see the venture as a move the market might have expected from Oakland, Calif.-based Marqeta. “For Marqueta, this is a way to preserve and enhance their market position, defending it from crypto-native players who may want to sell their own card-issuing platforms. It fills a potential gap in their portfolio,” notes Aaron McPherson, principal at AFM Consulting LLC, in an email message.
McPherson also sees expansion possibilities in the program. “I don’t think this has to be limited to proprietary cards,” he says. “A Visa or Mastercard network affiliation is more likely, and more useful. A proprietary card wouldn’t add much value beyond trading the stablecoins directly.”
The latest news builds on a prior venture between the companies. Marqeta in 2020 agreed to support the U.S. launch of the Coinbase Card, which was introduced to let users make routine purchases online or in stores. Behind the scenes, Coinbase handled conversion of cryptocurrency into U.S. dollars for both purchases and ATM withdrawals.
