MultiversX Tracker is Live!

Altcoin roundup: Crypto credit cards could be the missing link to mass adoption

The Cointelegraph ​

Cryptocoins News / The Cointelegraph ​ 07/24 303 Views

Hodling is nice, but eventually, everyone wants to buy something. This is why crypto debit and credit cards are key to mass adoption.

Out of the many routes available to the mass adoption of cryptocurrencies, which includes decentralized finance (DeFi), layer-one protocols, nonfungible tokens and stablecoins, perhaps the simplest and most applicable path for the public at large is the ability to utilize cryptocurrency for everyday purchases with an integrated debit or credit card.

2021 has seen a growing number of companies offer cryptocurrency-based credit cards that give holders the chance to tap into the value of their cryptocurrencies for daily purchases, but is this just the latest gimmick being used by businesses to earn a buck or a real sign of mass adoption?

While the traditional financial sector isn’t discussed much in this newsletter because its focus is on exploring the various sub-sectors of the cryptocurrency ecosystem, crypto assets are quickly becoming a new investment class recognized by the global financial system.

Debit cards tap into crypto holdings

It’s important to clarify the differences between the card services offered by some of the largest players in the game including Crypto.com, BlockFi and Coinbase.

Debit cards like the one offered by Crypto.com allow users to convert their cryptocurrency holdings to a stablecoin that can then be transacted on Visa’s global network.

The Coinbase card and crypto debit card offered by Uphold provide a similar service, with both offering rewards for use in the form of a percentage of each purchase, paid back in Bitcoin (BTC) or another cryptocurrency, depending on the platform.

Being able to make purchases with your holdings may help bring a good use case to the cryptocurrency ecosystem, but it also goes against the “hodl” nature of many investors who subscribe to Gresham’s Law that “bad money drives out good money in circulation.”

When it comes to which money is spent and which money is saved, good money, or cryptocurrencies, in this case, will be saved while fiat currencies will be spent in daily transactions.

Crypto credit allows hodlers to continue accumulating

Credit cards like the recently launched BlockFi Rewards Visa Signature Credit Card do not require an upfront conversion of a user’s crypto holdings to pay for transactions. Instead, it offers a credit limit with an attached interest rate.

Gemini exchange plans to offer a BTC cashback rewards card on the Mastercard network. This is another example that has taken the approach of the legacy credit system by offering rewards and charging interest on carried balances.

Users can spend fiat currencies and earn cashback rewards that are paid back in the form of Bitcoin.

Paying in dollars while stacking stats lines up more with the idea of spending bad money in daily transactions while earning more crypto, but it does require users to have fiat currencies to spend.

In the case where someone only has cryptocurrencies, they would be forced to convert some of their holdings to the accepted form of repayment and possibly incur a taxable event, depending on the laws where they live.

Currently, most of the world’s population either still uses the traditional financial system or is part of the large population of the unbanked who are outside of all systems. The injection of blockchain technology and cryptocurrency is either adding another step to the process or offering a new way into a financial network.

For die-hard crypto fans that hold as much of their wealth as possible in cryptocurrency, debit card options that allow users to spend their holdings may provide the best option.

Since many crypto investors work jobs that still pay in fiat currencies, credit card options offer a way to use their income to make purchases while also continuing to accumulate without having to conduct the conversion to crypto themselves.

Related: Bitcoin payments for real estate gain traction as crypto holders seek monetization

Legacy networks will eventually integrate blockchain technology

Visa and Mastercard have fully embraced the integration of cryptocurrencies and blockchain technology into their networks. Visa recently reported that its crypto-enabled cards holders spent more than $1 billion during the first half of 2021.

It’s possible that in the near future, the entire network could be blockchain-based and users will be interacting with digital currencies on a regular basis without even knowing it.

How it all plays out long-term is anyone’s guess, but the current trend of companies releasing cryptocurrency-related debit and credit cards shows no signs of slowing down. They are a tried-and-true marketing tactic used in industries large and small to help entice new users.

Want more information about trading and investing in crypto markets?

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.


Get BONUS $200 for FREE!

You can get bonuses upto $100 FREE BONUS when you:
💰 Install these recommended apps:
💲 SocialGood - 100% Crypto Back on Everyday Shopping
💲 xPortal - The DeFi For The Next Billion
💲 CryptoTab Browser - Lightweight, fast, and ready to mine!
💰 Register on these recommended exchanges:
🟡 Binance🟡 Bitfinex🟡 Bitmart🟡 Bittrex🟡 Bitget
🟡 CoinEx🟡 Crypto.com🟡 Gate.io🟡 Huobi🟡 Kucoin.



Read more

Related Posts

Comments