No one could have imagined the kind of impact cryptocurrencies would have on the global financial systems in such a short span of time. While they have been the fastest-growing assets in the markets, the number of opportunities has increased manifold from buying and selling, trading derivatives, etc. While the crypto markets are seeing a bearish turn, there are innovations happening every day.
People, innovators, and companies are busy building in the throes of a bear market. The projects that will focus on enhancing the user experience in crypto and giving them something to do with their crypto holdings will succeed in the next bull run.
A major issue pointed out by financial experts isn’t in favor of crypto, which is that it has no use in our day-to-day life. And the blockchain industry has been coming up with new-age solutions to age-old financial issues. The first innovation was smart contracts, and then came DeFi and NFTs which shook the traditional finance world to its core.
Now you can get yourself a crypto debit card and start using it like a fiat currency for buying real-world goods and services. A lot of companies globally have started accepting crypto payments. Getting them for yourself or your friends is a good way of showing your belief in the technology and bringing in real-world mass adoption.
What Is a Crypto Debit Card?
As the name suggests, it is like your traditional debit or credit cards that you use. A crypto debit card can be a physical or virtual one that can be used to make purchases, both online and offline. They are linked to a crypto wallet and can be used to buy stuff using crypto without having to convert it into fiat currency first.
A major advantage of using them is that you can use them at any point of sale or merchant that accepts Visa or MasterCard. It can come in handy if you are traveling to places that require you to convert your fiat currencies to their local ones. You can use them to make transactions seamlessly without having to worry about currency conversions.
Crypto debit cards are one of the innovations of the crypto industry that have real-world use cases and can bring about adoption on a mass scale. They can be used to give access to financial services without the need for having a bank account.
These debit cards also have variable rewards for their users. But in order to access these rewards, you might be required to stake some of the cryptos in your wallet. Moreover, there are limits to what amount can be spent using these cards. So, you can use them to make day-to-day expenses but not to make big purchases like a car.
Types of Crypto Debit Cards: Virtual and Physical
There are two types of cryptocurrency debit cards, namely, virtual and physical:
- Physical Cards: These are like your traditional ones and can be used just like them. But what sets them apart is the fact that unlike a traditional one being linked to your bank account, they are linked to your cryptocurrency wallet and not the bank account. This means they have similar functionalities to your bank cards but are using your crypto wallet instead.
- Virtual Cards: These are the ones that can be used mostly online and not offline like the physical ones. However, there are some new virtual card providers that issue cards that can be used both offline and online. So unlike a physical one, you get all the functionalities without having to carry it everywhere.
Hence, it depends on your preference and availability as to what kind of card you should get for yourself, a physical or a virtual one.
Differences between Crypto Debit Cards and Crypto Credit Cards
Everyone is aware of how traditional debit and credit cards function. They are linked to your bank accounts and any expenses made through them are charged to them.
Cryptocurrency debit cards on the other hand are linked to a cryptocurrency wallet and every purchase you make using them is deducted from that wallet. These cards are similar to traditional debit cards and have all their functionalities.
Cryptocurrency credit cards on the other hand are different from traditional understanding and don’t let you use the money you don’t have. These are cash-back credit cards that support crypto.
Every time you spend money using them, you earn cashback which is then used by the issuer to buy a cryptocurrency of the holder’s choice. Most of these credit cards let the holders pick between different cryptocurrencies, but some only offer one or two cryptocurrencies.
One important thing to keep in mind is that while these cards can be used like normal credit cards, the bill also needs to be paid off each month. Failure to do so would attract a penalty and even damage your credit score. Moreover, these cards can have an annual fee or transaction fee associated with them.
Hence, before getting cryptocurrency credit cards, make sure to go through the terms and conditions thoroughly.
Issuance of a Cryptocurrency Debit Card
If you are an investor and holder of cryptocurrencies, then getting crypto cards is a good decision for you. The process of getting it can vary based on who is issuing it. The process can involve a KYC and can usually take 1-2 business days to complete. Once KYC is completed, it is not guaranteed that you’d be issued one or not.
The issuers can have their own set of criteria to accept or deny the application. Some issuers might want you to open an account with the same bank as them, get identity verification done by your local government or decide based on your geographical location, etc.
Getting a card issued is not a simple task that can be completed overnight. It requires patience and effort and is dependent on certain pre-set conditions as mentioned above.
With the state of flux that the global economy has been suffering from in recent years, the need for an alternative financial system is the need of the hour. Crypto offers a solution and gives financial power back to the people. One way of giving people financial freedom is through a cryptocurrency debit card using which they can make payments for their everyday expenses using crypto.
The process of getting a cryptocurrency debit card can be a bit difficult and vary depending upon your location. But if you are someone that is into crypto full-time and want to use it in your daily life, then these cards are the answer. As the industry develops and becomes more mature, the options for users would increase and will give more benefits over time. And as an early adopter, you could stand to earn even while spending your crypto.