This credit card will offer rewards in bitcoin — and has 2,000 people on the waiting list
Who doesn’t like rewards? Obviously, almost everyone likes rewards either in the form of points, cash or travel rewards. But what if you received Bitcoins or basically cryptocurrencies instead of rewards?
Thomas Harrison is planning on doing exactly that with a new credit card known as – Blockrize. Thomas is basically a 25-year-old entrepreneur in San Francisco, who had earlier worked as the Head of Operations at Whatsgoodly, which was a polling app. The app was shut down in the summer of 2017 and eventually, he ended up as the CEO of Blockrize.
He had announced that Blockrize would offer to provide this cryptocurrency reward instead of the usual cash back or travel rewards. He also mentioned that they haven’t received a confirmation on their banking partner in order to issue the card, yet, Blockrize has already about 2,000 people in the waiting list. Thomas hopes the card will find a partner and be available to consumer by the end of 2018.
He started investing his own savings in cryptocurrency in September. “It was kind of an exhilarating experience,” he said. But he tired of the exchange fees, hence the idea for crypto rewards on a credit card.
The card would offer 1% of the value of users’ purchases back in cryptocurrency, initially, it’s just BTCUSD, +1.80% and ethereum, every time they buy something.
But he sees an opportunity for crypto rewards based on the aforementioned exchange fees. The popular exchange site Coinbase charges a 1.49% fee in the U.S. to buy cryptocurrency when using a U.S. bank account or a Coinbase digital wallet. And some banks that issue credit cards, including Capital One COF, -1.11% don’t let cardholders buy cryptocurrency with their cards. For those that do allow it, it costs 3.99%.
How does it work?
Thomas said. “You swipe your card in the morning, and the funds will be in your wallet that same day. Blockrize holds all the cryptocurrencies for its card holders and will allow them to buy and sell with one another for no fee. If they want to buy and sell with digital wallets outside of Blockrize’s network, there would be a small fee.”
There are no specific details about the tax, credit scores or interest rates except for the 1% payback in cryptocurrencies. Cardholders would be able to choose if they want to invest in bitcoin, ethereum or a 50/50 mix of the two.
Blockrize’s team currently just Thomas as the full-time employee, but he is indeed looking to hire more team members eventually. He has few advisors though, like –
- Zak Allen – the head of engineering at the financial technology company Shogun Enterprises.
- Alex Atallah – the co-founder of OpenSea.io, a peer-to-peer marketplace for the cryptocurrency.
- Jonathan Gelfand, managing partner at Card Linq, a financial services advisory firm.
Nick Clements, who is the co-founder of the personal finance company – MagnifyMoney, had also worked in the credit card company previously, and he says that “Whether or not he succeeds, crypto rewards are an interesting idea.”
He had also commented on the volatility of the cryptocurrencies, by saying, “Blockrize is the Wild West. Who knows where these currencies are going, and to promise any level of return is probably not a good idea.”