The Xbox One and Xbox 360 will officially use local currency instead of Microsoft Points come March 1.

So on March 1, 2014 Microsoft will convert your MS points to currency equal to or greater than the Xbox stores value of your Microsoft Points, and your Microsoft Points will be retired.

The Windows Store on a Windows 8.1 tablet or PC, and the Windows Phone Store on a Windows Phone 8 will also then use currency.

You can also choose to transition your Microsoft account to local currency at any time before the retiring by redeeming a Microsoft Points card or Xbox Gift Card or initiating a purchase.

Xbox Cards featuring local currency are now available for purchase in select retail stores and online retailers, and can be added to your Microsoft account. Microsoft Points cards you purchase in retail stores will continue to be redeemable on your console and Xbox.com until further notice.

Note that the funds Microsoft put into your account at the time of the transition will expire on June 1, 2015,
however, the currency you purchase and add to your account after the transition will not expire. Microsoft Points codes you received as part of Xbox Live Rewards, promotions, or contests will retain their original expiration dates after your account transitions.