Coinbase is partnering with Mastercard to allow card payments on its upcoming NFT marketplace. This means you’ll be able to directly purchase an NFT with fiat currency (also known as a government-issued currency, such as the USD) using your Mastercard credit or debit card, all without having to buy cryptocurrency first.
The cryptocurrency exchange says it’s working with Mastercard to “classify NFTs as ‘digital goods,’” which should, in turn, make NFTs more accessible to someone who might be uncomfortable purchasing and storing cryptocurrency. Most NFT marketplaces require that you purchase cryptocurrency first, add it to a secure wallet, and then connect that wallet to the marketplace, a process that obviously isn’t as simple as your typical online purchase.
What’s an NFT?
NFTs allow you to buy and sell ownership of unique digital items and keep track of who owns them using the blockchain. NFT stands for “non-fungible token,” and it can technically contain anything digital, including drawings, animated GIFs, songs, or items in video games. An NFT can either be one of a kind, like a real-life painting, or one copy of many, like trading cards, but the blockchain keeps track of who has ownership of the file.
NFTs have been making headlines lately, some selling for millions of dollars, with high-profile memes like Nyan Cat and the “deal with it” sunglasses being put up for auction. There’s also a lot of discussion about the massive electricity use and environmental impacts of NFTs. If you (understandably) still have questions, you can read through our NFT FAQ.
“Expanding the audience for NFTs allows this burgeoning market to support more creators and could spark the next evolution of digital commerce,” says Raj Dhamodharan, Mastercard’s executive vice president of digital asset and blockchain products, in an announcement on Mastercard’s site. “Getting more people involved safely and securely is perhaps the best way to help the NFT market thrive.” Dhamodharan also notes that Mastercard will use its acquisition of CipherTrace, a cryptocurrency intelligence company, to help bolster the safety of NFT purchases.
Coinbase first announced its NFT marketplace, called Coinbase NFT, in October, describing it as a platform that will let you trade, sell, and mint NFTs. Coinbase NFT still hasn’t gone live, but it does have a waitlist you can sign up for to gain early access. Other popular NFT marketplaces have already explored the possibility of adding credit and debit card payments, with Nifty Gateway offering such payments since day one. Rarible also offers the option of buying an NFT directly with a Visa or Mastercard.
On OpenSea, however, you still have to jump through the hoops of adding funds using a third-party service, called MoonPay, and then converting your fiat currency to Ethereum before making a purchase. Binance operates in a similar manner, with users required to load up a wallet with cryptocurrency before buying NFTs.