With the meteoric rise of cryptocurrency in the financial world, it is a reality check that we are already having an evolution in the global premise of finance. The digital currency has widely been touted as the dawn of the remarkable paradigm shift from the traditional form of finance to a decentralized model.
Also, early crypto adopters have predicted the future legitimacy of digital currency, just as fiat currency. Interestingly, this narrative is already rolling out, with the adoption of Bitcoin as the legal tender in El Salvador and some countries of the world creating their digital currency.
In the wake of this innovative development in the world of finance, crypto-funded debit cards are in the spotlight as it is created to serve the purposes of the regular banks’ debit cards.
What Is A Crypto Debit Card?
A debit card is not a new card to many. It is a plastic card containing relevant information about your account, in which the information is embedded through a scannable barcode or a chip. However, a debit card enables you to electronically pay for goods and services with the money in the related account.
Similar to the traditional bank debit card, a crypto debit card forms a linkage between a crypto payment processing company and a crypto wallet, hence enabling you to perform transactions with any business that accepts debit cards with the funds in your crypto wallet.
A crypto debit card is different from a traditional bank debit card with the automatic conversion of your cryptocurrency into your preferred fiat currency.
Things To Know When Using A Crypto Debit Card
1. Service Availability
As the adoption of cryptocurrency is being thrown heavyweight today, there is still a divergent poise to its adoption. Cryptocurrencies are reportedly a subject of the ban in some countries, like China, Turkey, India, etc, but other countries like the United States, United Kingdom are making moves to have their national digital currency, just as Nigeria recently launched its eNaira.
To this end, it is important to stay woke to the jurisdiction where cryptocurrency transaction appears hostile and countries that support them. This is either a green light or red light to the use of crypto debit cards.
2. Supported Cryptocurrencies
It is no news that there are thousands of cryptocurrencies out there in the crypto space, but just a few have a large user base. So it is advisable to opt for the crypto debit card that supports the most popular crypto tokens, better still, the one supported by your coin. Broadly, most crypto debit cards support many cryptocurrencies.
3. Fees And Exchange Rates
Several card providers are habitual of placing fees on different transactions. In the scope of crypto debit cards, most of the debit card providers do not charge deposit fees, withdrawal charges are always incurred.
Also, fees can be waived by the card providers when a threshold of annual crypto expenses is hit. As Forex fees are infamous in the traditional financial world, it is imperative to know if the card provider charges in the equivalent of foreign conversions.
Advantages Of Crypto Debit Cards
1. Ability to spend cryptocurrency in a way similar to fiat currency.
2. Some issuers waive ATM withdrawal fees.
3. Low or waived foreign exchange fees.
4. Cash-back rewards in the form of cryptocurrency can be offered by some cards.
5. Multi-currency enables diversified spending.
Disadvantages Of Crypto Debit Cards
1. They can be geographically restricted.
2. A balance must be available in your crypto wallet before you can spend.
3. Cryptocurrency expenses lead to being taxed.
The advent of cryptocurrency, especially Bitcoin is just around a decade, so the use of Bitcoin in connection to debit cards is an interesting fact. Do well to conduct background research before going for services like crypto debit cards.