U.S. crypto exchange giant Coinbase and multinational credit card firm Mastercard have entered into a partnership to “revolutionize” the way people purchase nonfungible tokens (NFTs).
In an announcement on Jan 18, Coinbase’s Product Senior Director Prakash Hariramani stated that the company wants to make it easier for users to enter the creator economy.
He added that Coinbase wants to apply the same easy process for buying cryptocurrencies to NFTs.
“That’s why we’re working with Mastercard to classify NFTs as ‘digital goods,’ allowing a broader group of consumers to purchase NFTs. And, coming soon we’ll “unlock” a new way to pay using Mastercard cards.”
Coinbase marketplace could introduce fiat for NFTs
The partnership could enable Coinbase users that also have a Mastercard to buy NFTs directly with fiat. Currently, purchases on leading platforms such as OpenSea need to be made with Ethereum or other supported crypto assets.
In a blog post on the partnership, Mastercard said that it wants to make buying NFTs as “simple as buying a t-shirt.”
The payments company added that the best way to encourage the NFT market to grow is by safely and securely allowing more people access to it. Mastercard hinted at further use cases beyond digital art, but did not elaborate;
“Mastercard sees even greater potential for NFTs’ underlying tech to go beyond art and collectibles into many more areas.”
The tie-up will work in conjunction with Coinbase’s NFT Marketplace which it announced in October. There has been no official launch date for this highly anticipated marketplace, and three months later it was still subject to a waiting list.
It is also highly likely that Coinbase will make a tidy profit from NFT transactions as it currently does with crypto. According to its Q3 financial report, the firm made 88% of its $1.2 billion in revenue from transaction fees.
OpenSea Acquires Dharma Labs
In a related development, the world’s largest NFT marketplace, OpenSea also has ambitions to enable fiat payments. On Jan 18, the company announced that it had acquired crypto wallet and payments platform Dharma Labs for an undisclosed amount.
Dharma, which is heavily tied in with Uniswap, allows users to deposit fiat in order to trade tokens on the DEX. Its existing app will be retired and it is possible that OpenSea will develop something similar with a fiat payment rail for NFTs.