The rewards credit card users will receive 1.5% back on all purchases made using the card to be launched in Q1 2021.
BlockFi, a New York-based cryptocurrency lender, just added “payments” to its list of products and services. BlockFi announced on December 1st that in collaboration with payment service Visa Inc (NYSE: V), it will be launching a Bitcoin rewards credit card early next year, the first of its kind.
Unlike traditional credit cards that offer air travel miles, cash backs, discounts or gift cards, Bloomberg reports that users of this new credit card will receive 1.5% back on all purchases in Bitcoin. This well-timed move comes as the public takes on a more favorable view of cryptocurrencies.
Existing and new BlockFi account holders will be able to register and join a priority list and receive their credit cards before the general public whose registration is expected to begin in January 2021.
BlockFi Is Taking Bitcoin Mainstream with Visa
BlockFi founder and CEO, Zac Prince, said the card is aimed at ‘expanding Bitcoin’s accessibility to a broader set of consumers’. Prince pointed out that the new credit card caters to BlockFi’s customers’ desire to hold and grow their bitcoin as opposed to the spending promoted by bitcoin reward debit cards.
Annual percentage rates on the credit card are expected to be considerably higher than interest on the crypto lender’s loans.
Prince says customers will be encouraged to use the card “for everyday spending, not for racking up debt.” BlockFi is, however, working on developing a system that will allow users to pay off their credit card debt with crypto.
The highly anticipated product will be launched about a quarter late due to BlockFi’s partners’ slow transition from working in the office to working remotely.
BlockFi will launch more credit and debit cards tied to customers’ crypto accounts in the future. Prince shared his vision for a future where customers can use their BlockFi account to deposit paychecks, send remittances, pay bills and conduct conventional banking activities.
Visa’s Fintech Fast-Track Program
Visa’s collaboration with BlockFi is by no means the payment company’s first brush with cryptocurrency. It is part of Visa’s Fintech Fast-Track Program. Terry Angelos, Senior VP and Head of Fintech at Visa says the program ‘aims to speed up the process of integrating and help innovative companies scale with efficiency’.
The card attracts a $200 annual fee with $250 in bonus bitcoin after the customer spends at least $3000 in the first 3 months.
While Visa is the card-issuing network, Evolve Bank & Trust issues Bank Identification Numbers (BINs) and Deserve is managing the payments flow technology.