Do you intend to obtain a crypto debit card? Also, do you know what are cryptocurrency debit cards and how they work? After extensive research, we will answer your question about crypto debit cards here.
Crypto adoption has been on the rise in recent years. According to sources such as triple-A, a business channel specializing in blockchain and cryptocurrency, the number of crypto users surpassed 300 million in 2017.
This figure 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 adoption of crypto debit cards is increasing due to the insane growth of crypto debit cards. Even better, the convenience of crypto debit cards has expanded significantly.
Aside from the growth of cryptocurrency adoption, other factors are driving the adoption of crypto debit cards. One of these factors is the ease of use that these cards provide.
Right now, there are numerous crypto card issuing companies 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 the others.
What are crypto debit cards, and how do they work?
Crypto debit cards are very similar to traditional debit cards. The primary distinction between the two cards is that you fund your crypto debit card using your crypto wallet, whereas a regular debit card is funded using a bank account.
Everything else about crypto debit cards is similar to regular cards. You can, for example, use this card to make online or in-store purchases. You can also make ATM withdrawals just like a regular debit card.
Regarding funding, these cards can be manually or automatically funded.
Manual funding requires you to sell your preferred amount of cryptocurrency on the platform provided. The fiat amount gets deposited into your account when 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 your crypto to fiat with these cards because the system does it for you. When you make a card purchase, the conversion process takes time.
In addition, you can break these processes of crypto to fiat conversion further 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 provided 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 shopping.
The Club Swan card is an example of a crypto card that works in this manner. More importantly, some of these cards let you select the type of fiat currency to which you want to convert.
2. Cryptocurrency to stablecoins to fiat
Cards in this category require you first to convert your cryptocurrency to stablecoins. The advantage of converting your crypto to stablecoins is that you won’t lose value due to crypto volatility.
When the need to make a purchase arises, all that is required is to convert the stablecoins to fiat. The pegged ratio governs the conversion of stablecoins to fiat.
3. Cryptocurrency to stablecoins
This category includes crypto debit cards requiring you to convert your cryptocurrency to stablecoins manually.
The system initiates 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 believe that merchants receive 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 increasingly become so popular. This is despite the increase in crypto adoption across the world.
Another reason is the benefits it bestows on the user. These benefits include:
1. Convenience
Are you a cryptocurrency investor? If you are, you will most likely want to use your cryptocurrency for day-to-day expenses. This is, thankfully, possible with a crypto debit card.
Using cryptocurrency for daily spending was extremely difficult in previous years. These cards, on the other hand, have made it extremely possible.
Even better, most of these cards are associated with 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 simple to use. When making a purchase, you must swipe your card or enter your card information.
It is also fairly simple to fund your card. All you have to do is sell your cryptocurrency and fund your card with fiat. Even better, some other cards do not require you to convert your cryptocurrency to fiat manually. 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.
Also, thanks to this, crypto continues to circulate in the market.
3. Easy Rewards
Different crypto debit cards have various reward systems. These systems can range from cashback to staking rewards to referral bonuses.
So far, cashback rewards have been the most popular reward system among crypto debit cards. The amount of crypto debit card rewards, on the other hand, varies from card to card.
Furthermore, different card companies have specific purchases for which they offer cashback.
Another intriguing type of reward system is the staking 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 staking amount. The higher and longer you stake, the greater your potential reward.
Also, there are crypto companies that reward you for referring new users. An example of a card issuing organization is Club Swan. It rewards you 20% of the joining fee for your referral.
Additionally, your membership level gets upgraded automatically and for free if you refer three people.
4. Highly Secure
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 devised incredible security measures to reduce crypto-related thefts.
Biometric scanning, passcodes, and two-factor authentication are examples of these safeguards.
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 instance, you can freeze your card or change the PIN in case of loss. Furthermore, you can report the loss on the app too.
5. Additional perks
Aside from cashback rewards, other crypto debit cards offer additional benefits. These card companies ensure that you have a good time whenever you use your card.
These benefits include fee waivers if your cryptocurrency expenditure reaches a certain threshold. Others offer discounts on services such as travel and lodging.
Access to private jet partnerships is also included on the list. Also, not to mention free subscriptions to streaming services such as Spotify, Netflix, and Amazon Prime.
Conclusion
In short, if you are planning to get a crypto debit card, these are some of the important things you should know about.