Cryptocurrency is slowly becoming a mainstream topic, but it’s still something of a niche market. If you’re looking to buy a few alt-coins or spend your hard-earned Bitcoin, you’re going to want some kind of debit card. (And yes, these are different from credit cards.) Cryptocurrency debit cards work the same way as traditional debit cards; you put money onto them, and you spend the balance. Crypto debit cards are most often tied to a Bitcoin wallet, which makes them a convenient way to spend your cryptocurrency holdings.
If you’re a cryptocurrency aficionado, there are many ways to spend your hard-earned coins. From buying groceries with bitcoin to withdrawing cash from ATMs, you’re not exactly destitute. However, there is still a glaring hole in the cryptocurrency payment system: debit cards. Crypto debit cards are a great idea on paper, but they rarely work in practice. The crypto community’s solution? Create your own.
As blockchain technology and the prominence of cryptocurrencies continue to grow, a number of new use cases are coming to market to increase the efficiency of existing financial systems.
Despite its many uses, the original use of bitcoin (BTC) as a medium of exchange remains one of the most fundamental applications of blockchain technology. While BTC are not the best assets for payments, there are service providers that have facilitated transactions in other cryptocurrencies.
Currently, the most common way to use cryptocurrencies for direct payments in everyday life is through cryptocurrency debit cards, which allow users to convert their cryptocurrency assets into US dollars. They work essentially the same way as prepaid debit cards.
With institutions showing more interest in the growing cryptocurrency sector and public awareness of blockchain technology never being higher, cryptocurrency debit cards are becoming more common as new players enter the market and try to grab a piece of this growing market.
Three proven debit cards with great rewards are BitPay, Crypto.com and Nexo Card.
The BitPay prepaid Mastercard has become the first choice of many cryptocurrency holders because of its ease of use and low cost. Originally launched in 2016 as a US-only debit card, it functioned primarily as a bitcoin payment processor.
BitPay now supports eight different fiat currency options, as well as Bitcoin, Ethereum (ETH), Gemini Dollar (GUSD), USD Coin (USDC), Paxos (PAX) and Bitcoin Cash (BCH).
Have you already added your BitPay card to @Apple Pay®? Easily shop online and in stores with cryptocurrencies. #apple #applepay #bitpay #bitcoin #bitpaywallet #bitpaycard #crypto pic.twitter.com/hRp7nm6vDu
– BitPay (@BitPay) 23. February 2021
Users wishing to obtain the card must first pay a $9.95 activation fee and provide their social security number and driver’s license to gain access. Once approved, the user can upload the cryptocurrencies to their BitPay wallet and then convert them into dollars to make them available on the card.
There are no transaction fees for U.S. users, and the card has a daily spending limit of $10,000 and a maximum balance of $25,000.
For cryptocurrency enthusiasts, the Crypto.com debit card is one of the best options because it includes its own Crypto.com Coin (CRO) token, which serves as the base currency and reward token for the blockchain.
Benefits of the card include 100% cashback on popular streaming services like Netflix and Spotify, and up to 8% cashback on everyday purchases.
Crypto.com users can choose from a list of over 100 leading cryptocurrencies to fund their card by depositing them into their account and converting them into stablecoins, which are then loaded onto their debit card.
We are pleased to announce a historic event: https://t.co/vCNztABJoG and @Visa have successfully completed the first transaction processing through USDC!
An important milestone for the industry as networks of crypto-currencies and fiat currencies begin to merge. https://t.co/v70qC8n4Yy
– Crypto.com (@cryptocom) 29. March 2021
The Crypto.com ecosystem offers five different Visa debit cards with a tiered reward structure that increases based on the amount of CROs a user has deposited into their account.
Levels range from 5,000 CRO for the Ruby Steel card to 5 million CRO for the Obsidian card, which offers 8% cashback on all purchases. There is also a basic version of the card that requires no wagering and offers 1% cashback on all purchases.
A third option that offers a different structure than most cryptocurrency debit cards is the Nexo card and its own cryptocurrency NEXO, which is currently trading at $3.63.
Instead of requiring users to convert cryptocurrencies in their account to U.S. dollars before using them, Nexo issues an immediate credit based on the value of the cryptocurrencies in the user’s account and settles the transaction in fiat currency.
Want to manage #cryptocurrency and spend it at the same time?
Our Instant Crypto Line of Credit™ is exactly what you need.
Do you need more reasons? Check out our blog post: https://t.co/uB0SkM4Qke
– Nexo (@NexoFinance) 22. April 2021
This allows users to access the value of their cryptocurrency assets without having to sell them. The loan can be repaid in either cryptocurrency or fiat through a Nexo account, with the option to repay the minimum payment from the proceeds of cryptocurrency assets provided by the user.
The interest rate on the card is 5.9%, and there are no monthly or annual switching fees. In addition, users receive 2% cashback in the form of Nexo or BTC tokens.
As more banks and institutions in the US and around the world look to the cryptocurrency sector for ways to tap into this growing market, cryptocurrency debit cards are likely to become a more important part of traditional payment channels.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Cointelegraph.com. Every investment and every transaction involves risk. So you need to do your own research before making a decision.
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