You can spend US Dollars (USD), USD Coin (USDC), or any supported crypto on Coinbase using your Coinbase Card without incurring any transaction fees. However, there are other fees and taxes to be aware of.
Coinbase does include a spread in the price to buy or sell cryptocurrencies. This allows us to temporarily lock in a price for trade execution while you review the transaction details prior to submitting your transaction.
You can withdraw cash from ATMs using your Coinbase Card with no fees from Coinbase; however, the ATM may charge a fee.
US tax implications
The IRS classifies cryptocurrency as “property” for tax purposes. Each time you use your card and sell cryptocurrency, it is treated as selling property in a taxable transaction.
Using your Coinbase card to make purchases is similar to selling your cryptocurrency on the Coinbase exchange. You will be required to report gains or losses from your use of the card on your tax return. As long as your USDC trades are at par with USD, the use of your card with USDC should not result in a taxable gain or loss.
Please consult your tax advisor to evaluate how your use of the card affects your specific tax situation.