Coinbase and Marqeta team up on stablecoin-backed cards

Coinbase will provide the stablecoin services behind card programs for Marqeta’s business customers, letting cardholders spend stablecoin balances at merchants that accept cards. The companies announced the collaboration on October 16, saying it will connect crypto balances to everyday card payments.

According to Marqeta’s announcement, Coinbase will hold the stablecoins and convert them to fiat currency, or government-issued money, when needed. Marqeta will issue the cards, process payments and manage relationships with banks and card networks.

How will the card payments work?

Coinbase will handle custody—the safekeeping of the stablecoin balances—and conversion between digital assets and regular money. Base, Coinbase’s blockchain, will provide the system for settling transactions on-chain, meaning recorded on a blockchain.

Marqeta said businesses will be able to fund their card programs at any time, around the clock. Cardholders will be able to spend from a stablecoin balance at millions of merchants that accept cards globally, according to the announcement.

The companies describe this as a way for firms to offer stablecoin-backed cards without building all of the payment infrastructure themselves. The release says the offering is aimed at both crypto-focused businesses and companies outside crypto.

What does each company bring to the partnership?

Coinbase supplies custody, currency conversion and settlement infrastructure through Base. Marqeta supplies card issuance and payment processing, along with the bank and network relationships needed to run card programs.

The deal expands an existing relationship: Marqeta already issues crypto-backed cards for Coinbase. The Block’s report says the firms have worked together since Coinbase named Marqeta as processor for its U.S. debit card in 2020.

When will businesses be able to use the service?

The announcement did not give a launch date, name the stablecoins that will be supported, or set out fees. It describes a planned collaboration, so those details remain open.

For now, the confirmed change is the division of work: Coinbase will manage the digital-asset side, while Marqeta handles card payments. That could give Marqeta’s business customers a route to let people spend stablecoins through card networks without paying merchants directly in crypto.

Sources

• Marqeta’s announcement — investors.marqeta.com
• The Block’s report — theblock.co