Thursday brought an announcement from Xapo CEO Wences Casares that a black bitcoin debit card for payment online or offline is seeking a bank partnership, according to Coin Desk late Thursday. The little black card will answer the question as to how to get bitcoin out of cold storage and into a consumer's hot wallet for spending.
An issue the Bitcoin community of venture capitalists and miners has faced is how to stabilize the price for spending. The reply has been to develop a payment method to allow bitcoin as a payment method to become a normal activity.
Xapo is a venture capital firm from Palo Alto, California was founded by Wences Casares, a start-up entrepreneur. His last venture was Lemon, a digital wallet, which he sold for $43 million to Lifelock. He is making a difference in the process for converting Bitcoin into a payment system. Xapo verifies the bitcoin funds when a purchase is transacted with a swipe or entry of the card number and the bitcoin payment (BTC) amount is redeemed and converted from Bitstamp bitcoin exchange to pay the merchant in local currency.
Coincard and Cryptex use prepaid bitcoin cards for payment. This international debit card, however, will convert the BTC immediately through the Bitstamp exchange and the merchant receives payment in their business bank account in the local currency.
Casares told CoinDesk that his company’s mission is to be the viable, consumer-focused bitcoin bank. Xapo black card holders only need to transfer bitcoin for payment from their cold storage to their hot wallet for payment transaction.
Casares in a statement today explained Xapo and the process: “We’re not a wallet company or a payment company. We are a bitcoin wallet, we are a bitcoin bank. Consumers need convenience and that’s why we provide our MasterCard debit card and why we will keep adding products based on our customers want.”
The use of bitcoin in a payment system will bring it mainstream. The volatility of price will be less in its swings once the consumer lets the bitcoin out of their storage and into their wallet for spending. Casares’ goal is to make use of bitcoin for payment a seamless and user friendly process for the merchant and the consumer which will advance the placement of bitcoin payments in mainstream transactions.
A late update at 2:30 GMT today by CoinDesk posted the following: “Xapo CEO Wences Casares spoke to CoinDesk to clarify the situation, stating that the company is currently working with an undisclosed bank to launch the open-loop debit card product, but it has yet to select a credit card network with which to power the offering. However, it was originally planning to use the ‘MasterCard network’.”