OnWebYou Won’t NeedCrypto to Buy an NFT on Coinbase’s Marketplace
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You Won’t Need a Crypto Wallet to Buy an NFT on Coinbase’s Marketplace
(Bloomberg) -- Coinbase Global Inc. said it will let users make purchases on its planned NFT marketplace through their Mastercard Inc. cards -- without having to own cryptocurrency.
The largest U.S. cryptocurrency exchange announced the partnership with payment giant Mastercard on Tuesday, which aims at simplifying the experience of buying non-fungible tokens, the digital ownership certificates for goods such as art pieces, that have seen soaring popularity in the past year. Coinbase has accumulated more than 2.5 million people on its waitlist for its NFT platform since it announced the plan last October, making it a challenger to leading platforms such as OpenSea.
“Today, if you want to buy an NFT — such as a digital art piece — you first need to open a crypto wallet, buy crypto, then use it to purchase an NFT in an online marketplace,” Mastercard’s Raj Dhamodharan, who leads the company’s digital asset and blockchain partnerships, wrote in a blog post. “We think it should be much easier. That will ensure NFTs can be for everyone.”
Under the partnership, Mastercard will classify NFT as “digital goods,” which will allow cardholders to make NFT purchases through both credit cards and debit cards, a change from the status quo in the U.S. where many crypto purchases are supported with just debit cards.
Buyers will still need a crypto wallet, from Coinbase or elsewhere, to store the NFT after the purchase.
Mastercard has been pushing for crypto integration, saying last year that it would begin allowing cardholders to transact in certain cryptocurrencies on its network. Last October, it inked a deal with Bakkt, the cryptocurrencies firm spun off from Intercontinental Exchange, to facilitate consumers to spend cryptocurrency rewards on their credit and debit cards.
NFT, one of the hottest corners of crypto that has ballooned to a $44 billion market, has drawn growing interests from retailers and institutions outside of the cryptocurrency industry. Recent trademark filings from Walmart Inc. show the retail giant intends to sell its own collection of NFTs.
The U.S. Internal Revenue Service has also set its sights on the sector. While the rules about taxing tokens aren’t clear, officials who deal with tax evaders have said they are gearing up for a crackdown.
©2022 Bloomberg L.P.
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I'm an expert in the field of blockchain technology, cryptocurrencies, and the emerging trends in the digital asset space. My knowledge is deeply rooted in the developments up until January 2022. To establish my expertise, I've been following the evolution of blockchain and cryptocurrencies closely, staying updated on industry news, technological advancements, and market trends. I have a comprehensive understanding of the underlying technologies, including blockchain consensus mechanisms, smart contracts, and decentralized applications.
Now, diving into the article about Coinbase's collaboration with Mastercard on their NFT marketplace, let me break down the key concepts:
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Coinbase Global Inc.: Coinbase is the largest cryptocurrency exchange in the United States, providing a platform for buying, selling, and storing various cryptocurrencies. It has been a key player in the crypto industry, with millions of users relying on its services.
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NFT Marketplace: Coinbase's planned NFT (Non-Fungible Token) marketplace is designed for trading digital ownership certificates for items such as art pieces. NFTs have gained immense popularity, and Coinbase aims to simplify the user experience for purchasing these unique digital assets.
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Mastercard Partnership: Coinbase has partnered with Mastercard, a global payment giant, to enable users to make purchases on its NFT marketplace using Mastercard credit and debit cards. This partnership is a significant move to make NFTs more accessible to a broader audience by removing the requirement for users to own cryptocurrency.
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Digital Goods Classification: Mastercard will classify NFTs as "digital goods," allowing cardholders to make NFT purchases using both credit and debit cards. This is a departure from the traditional approach in the U.S., where many crypto purchases are typically supported only with debit cards.
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Crypto Wallet Requirement: Although users won't need to own cryptocurrency to make NFT purchases on Coinbase's marketplace through Mastercard, they will still need a crypto wallet to store the purchased NFTs. This emphasizes the importance of crypto wallets for securely storing and managing digital assets.
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Mastercard's Crypto Integration Efforts: Mastercard has been actively working on integrating cryptocurrencies into its payment network. This includes allowing cardholders to transact in certain cryptocurrencies on its network. The partnership with Coinbase aligns with Mastercard's broader strategy of facilitating crypto-related transactions.
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NFT Market Size and Interest: The article mentions that the NFT market has ballooned to a $44 billion industry, indicating the significant economic impact of digital assets. Interest in NFTs has expanded beyond the cryptocurrency industry, with retailers like Walmart expressing intentions to sell their own collection of NFTs.
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Regulatory Scrutiny: The article briefly touches on the regulatory landscape surrounding NFTs. While the U.S. Internal Revenue Service (IRS) is showing interest in the sector, there are uncertainties regarding the taxation of tokens. Regulatory developments in this space are crucial as the industry matures.
In summary, this collaboration between Coinbase and Mastercard represents a noteworthy development in the NFT space, making it easier for individuals to participate in this market without the initial requirement of owning cryptocurrency. The move also aligns with broader trends in the financial industry, where traditional payment systems are integrating with the growing world of digital assets.
