Coinbase’s upcoming NFT platform will allow users to buy NFTs using fiat currencies

Two of the largest operators in the fiat and cryptocurrency space are coming together to build a bridge between these two. In an announcement late last night, payments service provider Mastercard announced a partnership with crypto exchange Coinbase, which will enable users to buy non-fungible tokens (NFTs) using fiat currency using cards that run on Mastercard’s network.

The payments provider also said that its September 2021 acquisition of crypto intelligence firm CipherTrace will be used to ensure that NFTs are bought securely over its network. 

While the NFT industry has been burgeoning all through 2021, a key hurdle in getting more users involved is that one has to actually own cryptocurrencies to purchase their own NFTs. As Mastercard pointed out in its announcement, “Today, if you want to buy an NFT — such as a digital art piece — you first need to open a crypto wallet, buy crypto, then use it to purchase an NFT in an online marketplace.”

At the time of writing, Bitcoin was trading at over $42,000 (around ₹33 lakh) on Indian exchanges. This means that while you can trade on an exchange for as low as ₹100, owning enough of a cryptocurrency to use it to purchase NFTs is difficult for most regular users. Allowing fiat currency to be spent directly solves that problem.

The partnership will take effect on Coinbase’s upcoming NFT platform, which was announced in October last year. In a blog post, the crypto exchange said that Mastercard will “classify NFTs” as “digital goods”, which likely means that people will be able to add these to their broader asset portfolio.

Coinbase isn’t the only platform to consider bringing fiat currencies to the world of NFTs either. OpenSea, the largest NFT platform in the world, had partnered with a service provider called MoonPay last year to allow fiat usage.

MoonPay acts as the middleman for transactions here, and converts fiat to crypto in transactions. It’s unclear whether Mastercard’s involvement means that NFTs will directly be bought using fiat currencies, but it’s a start the industry has been wanting for a long time now.