Are you thinking of getting a crypto debit card? Do you also know what cryptocurrency debit cards are and how they work? After extensive research, we will answer your question about crypto debit cards here.
Crypto adoption has been increasing in recent years. According to sources such as triple-A, a business channel specializing in blockchain and cryptocurrency, the number of crypto users exceeded 300 million in 2017.
This number has undoubtedly increased since then. In fact, some crypto experts predict that the number of cryptocurrency users will reach one billion by the end of 2022.
The use of crypto debit cards is increasing due to the crazy growth of crypto debit cards. Even better, the convenience of crypto debit cards has expanded significantly.
Apart from the growth of cryptocurrency adoption, there are other factors driving the use of crypto debit cards. One of these factors is the ease of use that these cards provide.
Right now there are many companies issuing crypto cards on the market. However, the main crypto card issuing companies are the crypto exchange platforms. Payment processing companies and membership clubs such as Club Swan, among others.
What are crypto debit cards and how do they work?
Crypto debit cards are very similar to traditional debit cards. The primary difference between the two cards is that you fund your crypto debit card using your crypto wallet, while a regular debit card is funded with a bank account.
Everything else about crypto debit cards is similar to regular cards. You can, for example, use this card to shop online or in a store. You can also make ATM withdrawals just like a regular debit card.
In terms of funding, these cards can be funded manually or automatically.
Manual funding requires you to sell your preferred amount of cryptocurrency on the platform offered. The fiat amount is deposited into your account once the exchange is complete. You can now fund your crypto debit card from here.
On the other hand, some cards automatically convert crypto to fiat. You don’t have to go through the hassle of converting crypto to fiat with these cards because the system does it for you. When you make a card purchase, the conversion process takes time.
Additionally, you can further break these crypto-to-fiat conversion processes into stages. These stages of conversion are:
1. Crypto to fiat
The majority of crypto debit cards fall into this category. If your card falls into this category, you must manually sell your cryptocurrency on the designated platform in exchange for fiat.
After a successful exchange, your fiat is deposited into your account. You can now fund your crypto from this account and start trading.
The Club Swan card is an example of a crypto card that works this way. More importantly, some of these cards allow you to choose the type of fiat currency you want to convert to.
2. Cryptocurrency to stablecoins to fiat
Cards in this category require you to first convert your cryptocurrency to stablecoins. The advantage of converting your crypto to stablecoins is that you will not lose value due to crypto volatility.
When the need to make a purchase arises, all that is required is to convert stablecoins to fiat. The fixed ratio governs the conversion of stablecoins to fiat.
3. Cryptocurrency to stablecoins
This category includes crypto debit cards that require you to convert your cryptocurrency to stablecoins manually.
The system starts any other process that occurs after converting your cryptocurrency to stablecoins. This means that without your knowledge, the system converts stablecoins to fiat.
As a result, you may think that merchants are receiving your payment in stablecoins, but in reality it is in fiat.
What are the benefits of crypto debit cards?
There are several reasons why crypto debit cards have become increasingly popular. This is despite the increase in crypto adoption worldwide.
Another reason is the benefits it provides the user. These benefits include:
Are you a cryptocurrency investor? If you are, you will most likely use your cryptocurrency for day-to-day expenses. Fortunately, this is possible with a crypto debit card.
Using cryptocurrency for daily expenses was extremely difficult in previous years. These cards, however, have made it extremely possible.
Even better, most of these cards are linked to international processing companies. As a result, you can use these cards to make purchases and even withdrawals anywhere in the world.
2. Easy to use
Crypto debit cards, like regular cards, are easy to use. When you make a purchase, you must swipe your card or enter your card information.
Funding your card is also quite easy. All you have to do is sell your cryptocurrency and fund your card with fiat. Even better, some other cards don’t require you to manually convert your cryptocurrency to fiat. The system handles the entire procedure.
Also, some crypto can take a long time to process. As a result, the card company agrees to cover your expenses. After completion of processing, the company deducts the amount from your cryptocurrency balance.
Thanks to this, crypto continues to circulate in the market.
3. Simple reward
Different crypto debit cards have different reward systems. These systems can range from cashback to stake rewards to referral bonuses.
So far, cashback rewards have been the most popular rewards system among crypto debit cards. However, the amount of crypto debit card rewards varies from card to card.
Furthermore, different card companies have specific purchases for which they offer cashback.
Another exciting type of reward system is the effort reward. Staking is putting your cryptocurrency to work by distributing it to a blockchain network. In exchange, the blockchain network will pay you interest based on your stake amount. The higher and longer you bet, the greater the potential reward.
There are also crypto companies that reward you for referring new users. An example of a card issuing organization is Club Swan. It rewards you with 20% of your referral’s participation fee.
In addition, your membership level is upgraded automatically and free of charge if you refer three people.
4. Very safe
Most crypto card issuing companies strive to provide the highest level of security for crypto debit card users. This is due to the recent significant increase in crypto scams.
According to a 2021 report by CNBC, a business channel, the number of crypto scams resulted in the loss of more than $14 billion in cryptocurrency.
As a result, most of these cryptocurrency issuing companies have developed incredible security measures to reduce crypto-related theft.
Biometric scanning, passwords and two-factor authentication are examples of these security measures.
Furthermore, most of these issues include an app that allows you to manage your card remotely. You can also manage the security of your crypto debit card through this app.
For example, you can freeze your card or change the PIN code in case of loss. In addition, you can report the loss on the app as well.
5. Additional benefits
Aside from cashback rewards, other crypto debit cards offer additional benefits. These card companies make sure you feel good when you use your card.
These benefits include fee waivers if your cryptocurrency spending reaches a certain threshold. Others offer discounts on services such as travel and accommodation.
Access to private jet partnerships is also included in the list. Also, not to mention free subscriptions to streaming services like Spotify, Netflix and Amazon Prime.
In short, if you are planning to get a crypto debit card, these are some of the important things you should know about.