Rising regulatory pressures may have limited crypto cards on offer but they remain a viable way to pay with coins where only fiat is accepted. With them, you spend crypto and that’s without the need to exchange it beforehand as it often happens when you want to pay with cryptocurrency in a fiat scenario.
Crypto Cards — How They Work and What Are the Offerings in 2023
While not as immediate as most in the crypto community would like, crypto cards nevertheless present an opportunity to pay with decentralized digital money where merchants would only take dollars, euros or any of the other central bank currencies.
Just like bank cards, crypto cards can come in physical, or plastic, and virtual form. The latter can be used to make payments online while the former can be also swiped or tapped at brick-and-mortar stores equipped with point of sale (POS) terminals.
They are several types of crypto cards, which differ slightly from the regular ones. Credit crypto cards, for example, use deposited crypto assets as collateral to extend a credit line in fiat. There are also fiat credit cards that offer coins and tokens as cashback or rewards.
The category that allows you to actually spend your digital coins or withdraw cash at ATMs are the crypto debit cards. These are linked to a cryptocurrency wallet and provide instant conversion to fiat at current exchange rates at the time of purchase or withdrawal.
While a couple of years ago you could hear about a new crypto card more often than these days, with the bear market and increased scrutiny by regulators leaving their mark, there are still a number of working solutions. These include offerings from well-established platforms in the sector.
America’s leading crypto exchange, Coinbase, has a crypto card allowing users to spend their default fiat currency, the stablecoin usd coin (USDC) or supported cryptocurrencies. The Coinbase Card is a Visa debit card available to residents of the U.S., excluding Hawaii, as well as the EU. On its website, Coinbase notes that spending crypto this way is a taxable transaction as it involves the sale of crypto assets. So you might want to check your local laws and regulations in that regard.
Binance, the world’s largest coin trading platform, introduced its Binance Card in 2020 but amid issues with regulators and banking partners this year, it announced in August that Visa had stopped issuing new its co-branded cards in Europe while Mastercard said it’s ending its partnership with Binance for markets in South America and the Middle East.
Meanwhile, another leading exchange, Bybit, launched a new crypto debit card in February. The Bybit Card is a Mastercard that supports top-ups in several major cryptocurrencies and stablecoins like bitcoin (BTC), ethereum (ETH) and tether (USDT). With a few exceptions, it can be currently ordered by customers living in countries from the European Economic Area (EEA) and the U.K. Other exchanges that maintain their own offerings include Crypto.com and Kucoin.
Venmo and Gemini issue credit cards with crypto cashback and rewards while Nexo introduced a feature on its crypto card this year which allows you to toggle between a crypto credit mode, if you want to spend without selling your deposited digital assets, and a debit mode that lets you pay with euros, British pounds and U.S. dollars and receive interest in fiat or tokens.
Bitpay and Wirex are among the earliest players in the market for crypto debit cards. In May of this year, the U.S.-based crypto payment processor Bitpay paused new applications for its prepaid Mastercard. Wirex is still offering both physical and virtual cards. The company recently announced it’s preparing to introduce an app chain called W-pay that will allow it to issue non-custodial cards.
Do you expect to see more crypto card offerings in the future? Tell us in the comments section below.
Source: Bitcoin
