Of all the great things happening between cryptocurrencies and traditional finance, crypto-funded debit cards are one of the most exciting. Crypto debit cards are game changer!
🔘 What is Crypto Debit Card?
Crypto debit card has the same concept of a fiat debit cards, it is still a plastic card in which your account/wallet information are stored in. Your card then will be connected between the payment processing companies and your wallet.
These debit cards will be only accepted at merchants that accept debit cards using crypto funds.
One big difference between a crypto debit card and a traditional debit card: a crypto debit card automatically converts the cryptocurrency you'll spend into your preferred fiat currency.
🔘 How do they work?
There are still several limitations on the usage of cryptocurrencies in the real world nowadays. You can’t simply go into any shop and pay for your purchase using Bitcoin or any other token. Retailers are still cautious about digital currencies, for many reasons, from legal uncertainty to exchange rate volatility and lack of understanding on blockchain and crypto in general.
However, many financial products and services providers seek to further legitimise cryptocurrency as valid form of payment and that will lead to the acceptance of crypto debit cards in many merchants if not all! How does it work? A Viking walks into a local supermarket that accepts debit cards, this Viking has the choice of using his normal debit card or his crypto debit card , he decides to give his crypto card a try, while the store does not accept cryptocurrencies, but it certainly take debit payments. When the payment is made via the crypto debit card, the processing company reached into the card's crypto wallet and took the dollar amount of crypto needed for the purchase. The processing company then converted the crypto into regular fiat currency and delivered it directly into the store’s account. This all happened in a manner of seconds, and highlights one more way that crypto is becoming a more accessible form of payment in the real world.
🔘 Floki Debit Card
Floki plan to introduce a Floki Debit Card in collaboration with key partners in the payments industry. Talks are at an advanced stage with select partners and this should be feasible by Q4 of this year. Holders of the Gemstone NFTs will be whitelisted for early access to this debit card before the wider community.
🔘 Pros and Cons of Crypto Debit Cards
Pros:
▫️Ability to spend cryptocurrency like fiat currency
▫️Reduced or waived foreign conversion fees
▫️Generally multi-currency allows diversified spending
▫️Some cards offer significant cash-back rewards in crypto
▫️ATM withdrawal fees can be waived by some issuers
Cons:
▫️Spending cryptocurrency triggers a taxable event
▫️Some geographical restrictions apply
▫️You must have balance in your wallet to spend
In the end, can a crypto debit card replace our normal debit card? Share your thoughts in the comments section.
