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Coinbase Debit Card Might Be Worthwhile

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Travel.Write.Money
@travelwritemoney
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A week or two ago, I had a message pop up on my phone informing me that my Coinbase Debit card invite was ready. I activated the card, which was available for use immediately. I could add it to my Apple Pay wallet, if I wanted. I looked into the details and was a bit put off. It's stupid. You would pay 2.49% to convert crypto to cash. Then, you would get 1% cash back in Bitcoin. It seems like a bonehead deal to me.

Another Look

In a moment of quiet contemplation, I started thinking about different configurations for the Coinbase Card. If you use USDC, there is no fee for converting to fiat. You could choose to get 1% cash back in BTC, or 4% cash back in XLM. Obviously, BTC is a win. But, XLM?

I started looking into Stellar (XLM). I'm quite surprised at what has been going on with XLM. If there are going to be any CBDCs, they're likely to run on Stellar. They already have the Ukraine lined up for their CBDC. There appear to be things in motion for Stellar to be the CBDC for the USA. Today, I saw an article that says that Circle, the company operating USDC, is working to become a Full-Reserve Bank.

https://decrypt.co/78059/circle-full-reserve-bank-usdc

This is important because USDC also runs on Stellar. In conjunction, USDC and Stellar are super efficient. I think this is how Coinbase is able to squeeze 4% cash back, paid in XLM. I didn't think it was that great at first, because it's not BTC. However, upon more research, I'm sold.

In terms of collaborators with the establishment, XLM is the biggest collaborator around. I learned that XLM is a clone of XRP, except that it's geared towards retail customers rather than institutional customers. There was a time when Ripple had stock in Moneygram. Now Stellar is looking to buy Moneygram. Stellar is also tight with Circle and Coinbase.

Put together all of these different parts and the schmoozing up to government, I think Stellar is positioning themselves to work with the Fed at some point. I could be wrong. But, they do seem to be making all the right friends.

It's Not All Good

Because of their coziness with government, Stellar has instituted some capabilities into their code, such as the ability to block transactions. This is one of the criticisms of governments having a CBDC, their ability to manipulate your spending ability. Stellar has all too gladly run to seek regulation and controls to appease the bureaucrats. But, this is not necessarily a bad thing.

The interest rate on USDC is lame.

It's Not All Bad

Stellar can be that bridge between fiat and crypto. Because Stellar is a full-blown crypto, it trades on exchanges. It is an on-ramp, off-ramp for value to be transferred. This is especially efficient with their implementation of USDC.

Back to the Coinbase Card

While I wasn't thrilled about the Coinbase Card at first, I am pleased with it now. It introduces some efficiencies into my personal finances that weren't possible. Let me go over some of the benefits.

Instant Transfer

I can buy USDC via ACH to top up the card. Coinbase makes the USDC instantly available to spend. I had been using the Crypto.com Visa card for 3% cash back in CRO. But, that takes half a day to fund by loading up my Apple Cash card, then transferring the balance to Crypto.com. No more waiting.

Fewer Restrictions

The Crypto.com card was great at first. After a while, however, they started restricting the rewards. I can't, for example, earn CRO rewards for paying my water bill, electric bill, car insurance, or taxes with the Crypto.com card anymore. For now, Coinbase does allow me to make these large payments with their card. Their list of restrictions mostly consist of gambling, crypto, and cash services.

Because of the Crypto.com card restrictions, I was putting those expenses on credit cards which pay at least 1% cash back. Something is better than nothing, right? But, now I can get 4% on all of it.

Better Budgeting

I don't plan on using the Coinbase Card for daily spend. I think it does a good job for budget spending. I'll send spending money to the Crypto.com card to avoid busting my budget. This will allow me to get off the credit cards in the long term. I just have to send my lump sum every pay day. Then, I can just wait for my expenses to deduct from the USDC balance.

Celsius

Unlike CRO rewards, which mainly benefit me at Crypto.com, earning XLM will allow me to transfer my rewards over to Celsius to earn interest. And, if one day my XLM savings becomes significant, I can use the XLM as collateral for loans. This is a great advantage I had not considered.

Over all, the Coinbase Card is turning out to be a great tool for simplifying my personal finances. I spent the evening mapping out my budget for the rest of the year. A majority of my regular expenses are routed to the Coinbase Card. The discretionary spending is routed to the Crypto.com card. And, I'll just pay off the credit cards in 10% increments until they're done. It feels like I have found what was missing in my financial world. But, this is only because I have come to realize the value of using USDC and XLM. Any other setup would be lousy, in my opinion.