With the rise of cryptocurrencies, one of the most convenient innovations is the crypto card, which allows users to make everyday purchases using their crypto holdings. But how exactly they work and how one can choose the best option?
Today, let’s explore crypto cards and how they work, focusing on three popular options. Whether you’re new to crypto or a seasoned investor, understanding the difference between them will help you decide which best fits your lifestyle best fits your lifestyle.
What Is a Crypto Card?
A crypto card functions similarly to a traditional debit or credit card but is linked to a cryptocurrency wallet instead of a bank account. These cards allow users to pay for goods and services with their crypto holdings, making it easier to use digital assets in everyday life. They support popular cryptocurrencies like Bitcoin and Ethereum and work with established payment gateways such as Visa and Mastercard.
What sets crypto cards apart is their ability to automatically convert cryptocurrency into fiat currency at the time of purchase. This means users can spend their digital assets at any merchant that accepts traditional card payments without manually exchanging crypto for cash beforehand. Additionally, many crypto cards offer rewards like cashback or perks in digital assets, making them an attractive option for crypto enthusiasts.
Advantages of Crypto Cards
Typically, investors store Bitcoin and other assets in custodial and non-custodial wallets. However, most still rely on traditional systems like Visa and Mastercard for everyday purchases. Crypto cards are an intermediary solution, allowing users to pay for goods and services with digital assets through popular gateways like Apple Pay and Google Pay. Some of the key advantages include:
- Low entry threshold: Crypto cards are almost indistinguishable from traditional banking cards. They are ideal for beginners in the crypto industry and digital asset owners who prefer not to use non-custodial wallets.
- Instant conversion: Automatic conversion eliminates the need to exchange cryptocurrency in advance.
- Rewards: Some crypto cards offer bonuses and cashback in cryptocurrency.
However, it’s important not to consider these cards a full-fledged tool for managing digital assets. Compared to wallets, their functions are much more limited. Users must undergo KYC verification, and crypto cards cannot be used for on-chain transactions or interaction with DeFi protocols. Visa and Mastercard issue crypto cards in partnership with licensed companies responsible for storing digital assets in user accounts. Below are examples of such integrations.
Crypto.com Card
The Crypto.com Card is a prepaid Visa card offered by Crypto.com, a Hong Kong-based company. Users can top up the card using other credit/debit cards, PayPal, bank transfers, and cryptocurrencies. Crypto.com offers five different card tiers, each with varying limits and bonuses.
Depending on the chosen card, users can earn rewards for holding Cronos (CRO) tokens, receive rebates on subscriptions like Spotify, Netflix, Prime, and X, enjoy cashback on travel bookings, gain access to airport lounges, and benefit from special services. Crypto.com does not charge issuance, maintenance, or transaction fees for the cards. However, some of the premium card options require staking CRO tokens (ranging from $400 to $400,000).
- Countries: European Union, UK, USA, Singapore, Canada, Brazil, Australia.
- Supported Cryptocurrencies: Over 100 coins, including Bitcoin and Ethereum. The list may vary depending on the user’s jurisdiction.
- Fees: 0.5%–2% for cash withdrawals exceeding the card limit.
Bybit Card
The Bybit Card is a virtual or physical Mastercard debit card linked to a Bybit exchange account. Cardholders can earn cashback ranging from 2% to 10% and accumulate points that can be redeemed for coupons, NFTs, subscriptions to services like Netflix and ChatGPT, gadgets, and partner products. The Bybit Card has no maintenance fees, and the exchange only charges €5 or $5 for the issuance of a physical card.
- Countries: Available in the European Economic Area (excluding Croatia, Iceland, Ireland, Liechtenstein, and Romania), Switzerland, Australia, and Argentina.
- Supported Cryptocurrencies: BTC, ETH, XRP, USDT, USDC, TON, MNT, and BNB.
- Fees: 0.5%–0.9% for cryptocurrency conversion and 0.5%–7% for foreign currency transactions. The first €100/$100 in monthly withdrawals are free, with a 2% fee on additional withdrawals.
MetaMask Card
The MetaMask Card is a debit card powered by Mastercard and linked directly to the MetaMask cryptocurrency wallet. Launched in collaboration with ConsenSys and Baanx, this product is currently in a pilot phase and available to several thousand users in the EU and UK. Full-scale deployment and expansion into other regions are expected by the end of 2024.
MetaMask Card holders can seamlessly spend digital assets from their wallets without converting them into fiat currency. The card operates on Linea, a zkEVM layer-2 solution for Ethereum developed by ConsenSys, ensuring efficient transactions.
- Countries: European Union, United Kingdom.
- Supported Cryptocurrencies: USDC, USDT, wETH.
- Fees: Gas fees in Linea are typically $0.02 for stablecoins. A 0.875% swap fee applies to other digital assets.
Conclusion
In conclusion, crypto cards are bridging the gap between the digital and traditional financial worlds, offering users a seamless way to spend their cryptocurrencies in everyday transactions. With instant conversion, rewards, and ease of use, they provide an accessible entry point for crypto newcomers and seasoned investors.
About Concorpad
Concorpad stands at the forefront as an innovative launchpad platform operating on the robust Concordium blockchain, poised to revolutionise the IDO landscape for inventive ventures. Our core mission is firmly rooted in bridging the divide between visionary concepts and the market, providing an all-encompassing framework from initiating token launch to its seamless listing. At Concorpad, our unwavering dedication revolves around cultivating growth and propelling innovation within the expansive realm of the blockchain ecosystem.
