Coinbase and Marqeta team up on stablecoin-backed cards

Card-issuing platform Marqeta (NASDAQ: MQ) said on Friday it is working with Coinbase so that businesses can hand their customers payment cards funded directly from stablecoin balances. The product targets Marqeta's enterprise clients, and the companies say it is meant for traditional firms as well as crypto-native ones.

Who does what

The announcement splits the job neatly between the two companies:

• Coinbase keeps custody of the stablecoin balances and converts between digital assets and fiat money when a card is used.
• Base, the Ethereum layer-2 network incubated by Coinbase, provides the onchain settlement layer.
• Marqeta issues the cards, processes payments and manages relationships with partner banks and card networks.

For the businesses running a card programme, the pitch is that they can top it up around the clock, not only during banking hours. Cardholders, in turn, can spend a stablecoin balance anywhere cards are accepted, which the companies describe as "millions of merchants" worldwide.

An old partnership, a new product

The two firms are not strangers. Marqeta has been the processor behind Coinbase's own crypto-backed debit card in the US since October 2020, and this deal widens that relationship from a single Coinbase product to a service other companies can resell.

"Coinbase is enabling businesses to move money with the speed and efficiency they require," said Alec Lovett, Coinbase's head of infrastructure products, in the release.

What is still missing

According to The Block's reading of the announcement, the companies did not disclose fees, a rollout date or which stablecoins will be supported first. USDC, which Coinbase co-founded with Circle, would be the obvious candidate, but neither firm has confirmed it.

The move fits a broader push by payment networks to wire stablecoins into everyday spending: this week Visa said its USDC prefunding service is now in commercial production, while Circle has been detailing how much of its USDC revenue goes to partners such as Coinbase. New to the asset class? Our explainer on what a stablecoin is covers how these dollar tokens are backed.