The crypto exchange and custodian fronted by Cameron and Tyler Winklevoss has purchased a FinTech company in order to get into the credit card business.
Gemini is a cryptocurrency exchange, crypto custodian, and…credit card issuer?
Today, Gemini announced the creation of its own credit card, due to be available to its US customers later this year. The Gemini Credit Card uses regular old dollars—but provides rewards in and other cryptocurrencies at a time when airline and hotel points have lost some of their utility.
The company has purchased startup Blockrize, which was already working on a crypto rewards card, in order to bring a branded product to market faster. Those who are on Blockrize’s waitlist, along with those who join Gemini’s waitlist, will be the first to have access to the new card.
According to a press release, the card will give “up to 3 percent back” on every purchase. Gemini Chief Operating Officer Noah Perlman told Decrypt the company would share details about the mechanics of how rewards are earned “as we get closer to launch.”
Perlman also declined to give specifics on potential connections to a credit card network such as Visa or Mastercard. However, he did say, “The Gemini Credit Card will run on a major payment network and will be accepted anywhere major credit cards are accepted—both domestically and abroad.”
As for why Gemini chose to push into the rewards space, Perlman indicated it’s a lot about how the coronavirus pandemic has altered that market.
“As consumers are less incentivized to use credit cards that offer hotel points or airline miles, which have [lost] utility due to the impacts of COVID-19, or even cash-back rewards, which lose value through inflation,” he told Decrypt, “the Gemini Credit Card offers people the opportunity to earn bitcoin on purchases, which is one of the best-performing asset classes in recent years.”
The exchange isn’t the first crypto firm to go this route. Crypto lending company BlockFi is preparing its own Bitcoin Rewards Credit Card for arrival this spring; it promises 1.5% cash back on transactions.
Meanwhile, mainstream finance hasn’t given up on traditional rewards. In December 2020, JPMorgan bought cxLoyalty Group, a rewards company that serves Capital One, Mastercard, and Citigroup. The investment bank said it was betting that people would be ready to use credit card travel rewards again in 2021.
But soon there will be even less standing in the way of travelers just paying with Bitcoin.