What Are Crypto Cards and Are They Relevant in 2022?
As the popularity of cryptocurrencies grows, more and more services come to the market, due to which clients can make the usual transactions: sell cryptocurrency, pay for purchases in online and offline stores with it, and much more. Along with crypto machines (analogs of ATMs or ATM), which allow withdrawing and depositing cash, crypto cards have appeared.
A crypto card is an analog of a bank card. It differs in that cryptocurrencies (Bitcoin, Ethereum, Litecoin and others), not fiat currencies (ruble, dollar, euro), are stored on the account. Now it’s not difficult to buy crypto card: the principle of obtaining it is similar to the process of opening a bank account.
What’s the Difference Between Crypto Cards and Classic Bank Cards?
The main difference between cryptocurrency cards and ordinary bank cards is that they store cryptocurrency assets instead of fiat ones. Users of such cards get the opportunity to spend cryptocurrency in small parts, instead of immediately withdrawing a large amount to fiat. Some cards allow having two balances at the same time — fiat and cryptocurrency, which greatly simplifies the use.
Sometimes crypto cards’ users can receive additional interest on deposits in cryptocurrencies or other bonuses.
How Do Crypto Debit and Credit Cards Work?
The principle of operation of crypto cards can be compared with how fiat currencies are exchanged using classic cards — when a person pays with a card, the bank automatically converts your national currency into the currency of another country. Here’s an example of how it works:
- a user makes a euro transaction to buy goods for US dollars;
- bank receives the request and automatically converts the EUR currency into USD at the current exchange rate;
- then the bank transfers the USD currency to the seller’s account.
In the case of using crypto cards, the principle remains the same, only cryptocurrencies act as the national currency: BTC, ETH, USDT and others. The customer pays for the purchase with cryptocurrency, and the card issuer converts it into fiat currency, which is accepted by the retailer.
If network users have a cryptocurrency that they no longer want to hold, a crypto card will help simplify the funds’ conversion into fiat. To convert without a crypto card, it’s enough to manually transfer fiat to a bank account — this may take several days, depending on the bank and the cryptocurrency exchange. A crypto card is indeed one of the most convenient ways to pay for purchases with cryptocurrency!