The No. 1 cryptocurrency exchange on Thursday told customers that payments for digital assets on its platform are being processed as “cash advances,” which could result in additional fees.
The change may not be new to some users of Coinbase since the company has been processing purchases in the U.S. and Canada as cash advances for the past several weeks, which crypto enthusiasts have pointed out.
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However, it is the first time San Francisco-based Coinbase, which operates in two dozen states and overseas and has about 13 million users, has publicly acknowledged the change.
“Recently, the MCC code for digital currency purchases was changed by a number of the major credit card networks. The new code will allow banks and card issuers to charge additional ‘cash advance’ fees. These fees aren’t charged or collected by Coinbase. These additional fees will show up as a separate line item on your card statement,” Coinbase wrote in a statement on Thursday.
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An MCC code refers to a merchant category code, which is a four-digit number that signifies to a financial institution what type of transaction has occurred.
The move comes as a number of bank and card issuers have announced that they would be reviewing changes to their policies around the purchases of crypto assets using credit cards, which has been a signature development that underlines the speculative hype around bitcoin BTCUSD, -14.24% and its ilk.
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