BlockFi, a cryptocurrency services company, released its first-ever crypto rewards credit card to qualified consumers in the United States on Tuesday, in collaboration with Visa. BlockFi's ambitions for a credit card were first revealed in December 2020, when the exchange announced a 400,000-strong waiting list for US-based clients. Everyone on the waitlist should receive their card by the end of July, according to BlockFi CEO Zac Prince.
The new service allows customers to buy bitcoin without having to pay fees or go through the often-complicated onboarding processes at exchanges. BlockFi stands to gain from using the card to acquire customers as well as the fees it will earn on money spent on the card.
Flori Marquez, BlockFi's Co-Founder and SVP of Operations, remarked, "The crypto sector has come a long way from the initial Bitcoin payment transaction 11 years ago." “Today, almost everyone is aware of the critical role that cryptocurrency plays in transforming the financial landscape, and our new credit card is poised to be a game-changer as well. People will be able to earn Bitcoin back on their everyday purchases more easily than ever before with this card.”
BlockFi's Rewards Visa Card holders will receive 1.5 percent back in bitcoin for every dollar spent, with the reward increasing to 2% for every dollar spent over $50,000 per year. New members will receive a 3.5 percent bitcoin reward rate for the first 90 days, or until they receive $100 in bitcoin, as an incentive. The card also comes with other perks, such as trading fee rebates and no annual or international transaction fees.
When compared to other standard cards, their incentives are competitive. For example, Bank of America's Customized Cash Rewards credit card gives customers 3% cash back in one spending category of their choice, 2% cash back on groceries automatically, and 1% cash back on all other purchases.
However, depending on an individual's purchasing patterns, Gemini, the crypto exchange founded by the Winklevoss twins, may outperform them when it introduces its crypto rewards credit card in cooperation with Mastercard this summer. While BlockFi now only offers bitcoin rewards, Gemini will pay customers 3% back on dining purchases made in any cryptocurrency accepted on the exchange, with no yearly or exchange fees. However, on groceries, the benefits drop to 2%, and on everything else, they drop to 1%.
The BlockFi crypto rewards credit card is also a new offering in Visa's growing cryptocurrency sector. The electronic payments company has collaborated with many crypto firms to offer Visa debit cards, and in the first half of 2020, it facilitated over $1 billion in volume through crypto-linked cards, but the BlockFi relationship will bring the company's first crypto rewards credit card. Visa made Forbes' Blockchain 50 list in 2021 after filing over 150 blockchain-related patents and announcing a partnership with USDC, a dollar-pegged stablecoin.
Terry Angelos, SVP and Global Head of Fintech at Visa, said, "Crypto rewards programmes are a compelling approach to engage customers in the crypto economy." “Programs like the BlockFi Rewards Visa Card, which offer rewards appropriate to the burgeoning community of digital currency consumers, are exciting to see.”