Cryptocurrencies have become an emerging asset class and can even be settled in the real world. Paying for groceries with bitcoin is easy. To do this, you need a crypto card. How does it work? Let’s figure it out.
Until a few years ago, the number of fiat gateways for cryptocurrencies was very limited. Users were mostly limited to bank transfers and bitcoin ATMs. But the environment has changed dramatically in recent years as financial giants such as Visa and MasterCard have begun to “accept” bitcoin and other digital assets.
What is a Cryptocurrency Credit/Debit Card?
Crypto credit card and debit card work just like regular payment cards. The only difference is that instead of money, cryptocurrency is used to pay for goods and services.
However, it is important to understand that you cannot directly pay with BTC, ETH, and other crypto assets. These cards convert digital assets into local fiat currency and then send them to the merchant.
Crypto credit cards are supported by two global financial networks, Visa and MasterCard. Once licensed, the crypto company issues a crypto card to users, which is supported in any store that accepts Visa or MasterCard payments.
Who are these cards for?
Crypto credit and debit cards make assets portable as they can be carried with you all the time. Does the person want to dine at a good restaurant or drink coffee at Starbucks? If Visa is accepted there, he can pay with cryptocurrencies. The transaction is finished in only several minutes.
Theretofore, it was nearly unbelievable to operate cryptocurrency in shops, as trades took up to 30 minutes. But with Visa-based crypto cards, this issue has faded.
How does a crypto card work?
Cryptocurrency cards differ in their business model and how they spend and store digital assets. Some may not provide rewards for use, and others have a hard monthly withdrawal limit.
If we talk about storage, then there are two options:
- When a user creates a separate wallet on the platform of the company that issued the crypto card.
- When the crypto card is synchronized for example with the client’s online ripple wallet.
In the first case, you will have to transfer your assets to a new wallet. In the second, you can link your cryptocurrency credit card to a wallet already in use.
You can immediately start making purchases and payments by connecting a crypto card. As mentioned, all cryptocurrencies are converted to fiat when using the card. However, some platforms may require you to convert your cryptocurrency to fiat before loading the card with money.
Because Visa or Mastercard licenses all cards, they are subject to the same restrictions and rules as regular credit cards. For example, maximum balances, maximum daily payouts, monthly withdrawal limits, and so on.
Some platforms use a loyalty system where different groups of users have access to different features. Cashback is the most common feature in this context. There may even be a condition where the user can access the best card limits you can unlock by staking your cryptocurrency.
Have you fully accepted the world of digital assets and thought that fiat money is useless? Then crypto cards are a perfect choice. Start using cryptocurrencies now.