While investing in cryptocurrency has undoubtedly become more mainstream, it hasn’t been possible to use it to pay for everyday goods and services in the same way you would a debit card.
Silicon Valley-based crypto platform Uphold is trying to change that. The firm says it is revolutionising the way in which consumers shop, through the introduction of a debit card that’s hooked up to their bitcoin, metal and equity investments.
It means anything – from groceries to handyman services – can be paid for with a simple swipe of a debit card.
The UK is the fastest-growing market for crypto platform Uphold, as the adoption of cryptocurrency gathers pace in Europe
For investors, this avoids the hassle of first converting their crypto investments back into pounds.
Simon McLoughlin, president and chief operating officer of Uphold, says of the debit card – due to be launched in the UK this summer: ‘You can “spend” Tesla stock and gold. It’s giving flexibility that people have never had before.’
Although the company is headquartered in America, Uphold is rapidly expanding in the UK.
British sign-ups have increased five times in the last 12 months, with an average of 15,000 new customers a month in 2021 compared with around 2,500 last year.
Transaction volumes have also leapt 16 times during the first quarter of 2021.
McLoughlin says: ‘Uphold’s whole story comes down to making financial access easy to people. It takes away the technical jargon and friction that scares the average user.’
‘Anything to anything’ model
Uphold is a platform that allows users to buy and sell bitcoin and other cryptocurrencies, which is not unique.
But the people behind the crypto platform say its main selling point is its ‘anything to anything’ model.
McLoughlin says: ‘I should point out that the vision is broader than crypto. What’s special about us is that we bring together crypto, precious metals, US equities and foreign exchange currencies. You can go from Tesla stock to bitcoin or bitcoin to physical gold.
Simon McLoughlin, president and chief operating officer of Uphold, says Uphold is democratising hard to reach investments
‘On other platforms it would be two trays and two sets of fees. As you’d sell bitcoin to dollars and then buy Tesla stock, for example. So, it’s very easy access to a whole range of asset classes.’
Besides offering consumers the ability to use a multi-asset crypto debit card, Uphold also allow users to pay third parties digitally.
Later this year, it wants to allow people to get paid by their employer in bitcoin or choose a split.
McLoughlin explains: ‘They can get paid 10 per cent in bitcoin and five per cent in gold. It becomes really interesting when you give people choices.’
McLoughlin claims Uphold is competitive on price too. It charges a spread on every transaction. Its suppliers vary, but typically users can expect to pay around one per cent – so converting £1,000 into bitcoin would cost £10.
This is still lower than the 1.5 – 2.5 per cent that competitors like Revolut charge for cryptocurrency exchanges (Revolut charges 1.5 percent for premium and metal users). Other advantages of using Uphold include no minimum investments or dormancy fees.
When it comes to the green issues surrounding cryptocurrency investment, Uphold has been vocal.
Just this month it has tried to address Elon Musk’s concerns over the environmental impact of bitcoin, by challenging him to use their net carbon neutral version, bitcoinzero – an ERC-20 token delivering Bitcoin with net zero emissions.
Uphold, unlike many other platforms, has continued to list XRP despite the SEC’s complaint, since there has been no court judgment on the issue yet and therefore no change in US law
Simon McLoughlin, president and chief operating officer of Uphold
It even said it would give away five new Teslas to those who convey the message to the business magnate, who appears to be trying to single-handedly burst the bitcoin bubble.
Bitcoin’s value plunged more than 20 per cent after Musk tweeted: ‘Tesla has suspended vehicle purchases using bitcoin.
‘We are concerned about rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel’.
Musk went on to say that Tesla would use bitcoin for transactions as soon as mining transitioned to more sustainable energy, and that the company would instead be looking at other cryptocurrencies that use less than one per cent of bitcoin’s energy.
Uphold’s crypto origins
Cryptocurrency enthusiasts are spoilt for choice, because Uphold offers a smorgasbord of options. There are more than 45 digital currencies to choose from including majors, alt coins, emerging tokens and stable coins.
Uphold says that in 2021 the top purchase for UK users by far has been XRP, which has seen eight times more dollar volume transacted than bitcoin – the top cryptocurrency bought on the platform during the first quarter of last year.
The company acknowledges that interest in XRP has grown following its issuer’s contentious fight with the US’ Securities and Exchange Commission. It hasn’t however, resulted in Uphold shying away from XRP.
Uphold is allowing users to invest in XRP in spite of the Securities and Exchange Commission’s complaint against Ripple Labs
McLoughlin explains: ‘The huge increase in XRP volumes reflects the volatility introduced into the XRP price by the SEC’s complaint against Ripple Labs.
‘XRP has swung from a low of $0.21. to a high of $1.91 in 2021. Uphold, unlike many other platforms, has continued to list XRP despite the SEC’s complaint, since there has been no court judgment on the issue yet and therefore no change in US law.’
Uphold, which was founded by American entrepreneur Halsey Minor (best known for founding media company CNET) in 2014, has certainly come a long way since its early days as a bitcoin platform operating under the name Bitreserve.
Just four years after the rebrand it attracted venture capital from Greg Kidd who entered into a $57.5million partnership with Uphold and joined its board of directors. Kidd has also invested in Ripple, Square and Coinbase.
Uphold now offers six million customers easy and cheap access into the cryptocurrency and alternative investment realms.
Investors can even grow their investments through staking (see ‘What is staking?’) digital currencies like Ethereum 2.0, Polkadot, Solana and Cosmos.
It doesn’t mean that anything will be accepted to the platform, though. Uphold doesn’t list privacy coins, for example, deeming them too much of a risk.
There’s also a listing committee that investigates and approves any new crypto that’s being considered for the platform.
Uphold’s ambition is to democratise investments by opening up access to traditionally hard-to-reach asset classes, and it looks like it has achieved this aim.
McLoughlin says: ‘Until now crypto has been something ordinary investors could afford to ignore, as it was seen as a high-risk niche activity pursued by a small proportion of sophisticated traders – but now you can’t ignore it.’
But he acknowledges that Uphold can’t take all credit for the hype surrounding digital currencies.
‘Companies like Tesla have bought bitcoin – I think that’s taken the edge off for ordinary retail investors and moved it to ‘this is something I need to take a look at’.’
What is staking?
Staking is the process of participating in a transaction validation on a proof of stake (PoS) blockchain. It effectively allows investors the ability to earn a passive income off their digital currency.
Uphold says: ‘Once a user has the minimum amount of cryptocurrency required they’ll receive rewards for holding the coin in their wallet.’
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