Crypto debit cards have had something of a checkered past, especially with the declared insolvency of industry leader WireCard in the first half of 2020. WireCard’s CEO, Markus Braun, was arrested and suspected of engaging in market manipulation. Earlier attempts to make moves in the crypto debit card space have also suffered setbacks and dissolution, such as in 2018 when Visa ordered WaveCrest to close all the jointly created prepaid cards over a supposed regulatory infringement. The issue with many crypto based debit cards is the lack of trust and reliability that they impart to customers. Several prominent cryptocurrency exchanges like Mt. Gox and Bitfinex have been the victims of hacking and theft, and many governments across the globe have taken adversarial steps against cryptocurrencies. However, as industry involvement has expanded and the legitimacy of cryptocurrencies in the eyes of the public has expanded, so has the usefulness of crypto debit cards. In this article, we’ll go over a few useful aspects of a crypto debit card.
It Works Exactly Like Your Regular Debit Card
Many people, especially those who aren’t crypto savvy, might be put off by the word crypto in their name, thinking these cards might be more complicated to use. However, these fears are unfounded, as the process for using these debit cards is the same as the ones issued by your bank. The crucial difference is that instead of being linked to your bank account like your regular debit card would be, your crypto debit card would be connected to a crypto wallet. Often, this means having to use a wallet offered by a cryptocurrency company, like Crypterium or Crypto.com.
Comes in Two Forms: Physical and Virtual
Most companies that offer crypto debit cards do so in two ways: you can request a physical card, a virtual one, or both. If you’re looking to just have online purchases, then a virtual one can suit your needs just fine. However, if you intend on using a card at a point of service device like those offered by Square, then you must get a physical debit card. Physical crypto debit cards, unlike their virtual counterparts, have the additional benefit of being able to withdraw money from an ATM. There’s also no need to worry about your crypto debit card’s versatility: anywhere you can use a traditional debit card, you can use your crypto debit card. Many companies have even produced their own debit cards that support crypto, such as Visa and UnionPay.
There are some downsides, however, to using a crypto debit card.
Your Risk is Centralised
One of the major benefits of using cryptocurrencies is that the risk is all on your ability to safeguard your assets. However, this risk is transferred onto your crypto wallet service if you were to use a crypto debit card, which means you must do due diligence to ensure the firm you’re relying on is secure. Additionally, you might find that there are area restrictions on receiving a crypto debit card. Many firms that offer these services only do so for select regions, which could mean you’re left unbanked. Lastly, there’s an element of opportunity for risk involved. Many people, rightly or wrongly, treat cryptocurrencies as an investment class, not unlike gold or stocks. This means that by buying items with your cryptocurrency, you’re accepting that the value of the cryptocurrency used may rise in value, costing you more than just what you purchased.
Ultimately, deciding to get a crypto debit card is one that depends on your needs. If the conveniences outweigh the potential drawbacks, then a cryptocurrency debit card is for you.