Coinbase and Marqeta team up on stablecoin-backed cards

Marqeta and Coinbase announced a collaboration on Oct. 16 to let businesses offer cards funded by customers’ stablecoin balances, with Coinbase handling custody and conversion and Base providing settlement. The companies say the cards will let users spend stablecoins at merchants that accept cards.

• Businesses can fund card programs 24 hours a day, seven days a week.
• Cardholders can spend at millions of merchants globally, according to the companies.
• Base, Coinbase’s blockchain, will provide the onchain settlement infrastructure.

Marqeta’s announcement carried by Business Wire describes the service as aimed at Marqeta’s enterprise customers, including crypto and non-crypto firms. It expands an existing relationship: Marqeta already issues crypto-backed cards for Coinbase.

How will stablecoin card payments work?

Coinbase will hold customers’ stablecoin balances and convert digital assets into traditional currency for card spending. Base will handle the onchain settlement, the process of recording and completing transfers on a blockchain.

Marqeta will issue the cards, process payments and manage relationships with banks and payment networks. The arrangement brings crypto custody and conversion together with the card systems businesses need to offer a payment product.

The companies say customers will be able to spend from a stablecoin balance at card-accepting merchants globally. Their announcement does not name which stablecoins will be supported first or explain how a cardholder will choose or change the asset used for a purchase.

Who can offer the cards, and when?

The service is designed for Marqeta’s business customers, which can use the platform to offer cards to their own users. That gives crypto firms a way to connect stablecoin balances to card spending, while non-crypto businesses could add the option through Marqeta’s platform.

The companies say businesses will be able to fund programs around the clock. The announcement does not give a launch date, identify an initial customer or say when cardholders will be able to use the service.

It also leaves out fees and any limits on spending or funding. Those details matter to businesses weighing the service against existing card programs, and to users deciding whether spending from a stablecoin balance suits them.

What does the expanded Coinbase relationship add?

The partnership builds on Marqeta’s earlier work processing Coinbase’s own card. The Block reported the collaboration expands a six-year relationship, and noted that Marqeta was named processor for Coinbase’s US debit card in October 2020.

This new effort shifts the focus to card programs run by other businesses. Coinbase supplies custody, currency conversion and Base settlement; Marqeta supplies card issuing and payment processing. The companies have announced the roles and intended use, but have not yet disclosed availability or the commercial terms.

Sources and documents

• announcement carried by Business Wire — businesswire.com
• reported the collaboration expands a six-year relationship — theblock.co