Crypto exchange and custodian Gemini has acquired fintech startup Blockrize to launch a credit card in the U.S. that would offer up to 3% rewards in bitcoin and other cryptocurrencies.
Gemini did not disclose the deal’s terms, but COO Noah Perlman told The Block that the company acquired Blockrize in the third quarter of 2020, and all four employees of the startup joined Gemini at the time.
Both teams are working together to launch the credit card later this year, and users in all 50 U.S. states will be able to earn crypto rewards by spending U.S. dollars.
“It’s a great way for customers to invest in crypto, get exposure to the asset class, and then be able to sort of get the gains almost like a passive investment, Perlman told The Block. “And then to the extent that there’s an increase in the value of those assets, that will accrue to them.”
Perlman said bitcoin is one of the best performing investments of the last decade and provides a hedge against inflation, so the card is going to a “compelling” product.
“Financial rewards are changing,” said Perlman. “Consumers are likely less eager to earn hotel points or airline miles, not just because of covid, but obviously because they’re consistently devalued and even cash back in some cases. One of the compelling aspects of crypto is the fact that it’s an inflationary hedge.”
It is not clear whether the card will be a Visa or a MasterCard offering, Perlman said those details would be announced “closer to launch.” Other information such as card fees and bonuses, if any, will also be released later this year.
Gemini has opened up a waitlist for the card. Anyone can join the list, but once they get the card, they will have to open a Gemini account because rewards will be deposited there directly. Accumulated rewards can then be transferred to anyone and be used for trading and other purposes, said Perlman.
Details of the card issuer and payments processor will also be announced closer to launch, said Perlman. As for how the card will stand in a competitive landscape, Perlman said, “we’re building some exciting features that we’re confident will differentiate our card in the market. Those details, though, we will announce again closer to launch.”
Last month, BlockFi also announced that it is launching a credit card in the U.S. in the coming months. The firm will offer a flat 1.5% reward in bitcoin for every transaction via the card.
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