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Altcoin Roundup: Crypto Credit Cards Could Be the Missing Link to Mass Adoption

Of the many routes available for mass adoption of cryptocurrencies, including decentralized finance (DeFi), layer-one protocols, non-fungible tokens and stablecoins, perhaps the simplest and most applicable route for the masses is to use cryptocurrencies. ability. Daily purchases with an integrated debit or credit card.

A large number of companies will offer cryptocurrency-based credit cards in 2021 to give holders a chance to tap into the value of their cryptocurrencies for daily purchases, but is this just the latest ploy to be used by businesses for a buck or a real signal? Is mass adoption being done to earn?

Although the traditional financial sector is not discussed much in this paper as its focus is on exploring different 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 distinction between card services offered by some of the biggest players in the game, including Crypto.com, BlockFi, and Coinbase.

Debit cards offered by Crypto.com allow users to convert their cryptocurrency holdings into a stable currency that can then be transacted on Visa’s global network.

The Coinbase card and crypto debit card offered by Uphold offer a similar service, both offering rewards for use as a percentage of each purchase paid in bitcoin (BTC) or any other cryptocurrency, depending on the platform. .

Being able to make purchases with your holdings can help bring a good use case to the cryptocurrency ecosystem, but it also goes against the “hoddle” nature of many investors who subscribe to Gresham’s law that “bad money”. Takes 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.

Allows crypto credit holders to continue making deposits

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

Gemini Exchange is planning to introduce a BTC cashback rewards card on the MasterCard network. This is another example that has adopted the legacy credit system approach, offering rewards and charging interest on the carried balance.

Users can spend fiat currencies and earn cashback rewards which are paid in the form of bitcoins.

Paying in dollars while stacking figures with the idea of ​​spending bad money in daily transactions while earning more crypto, but requires fiat currencies for users to spend.

In the case where someone only holds cryptocurrencies, they will be forced to convert some of their holdings to an accepted form of repayment and potentially incur a taxable event based 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 unbanked people who are out of all systems. The injection of blockchain technology and cryptocurrency is either adding another step to the process or introducing a new way into financial networks.

For crypto fans who hold as much money in crypto as possible, debit card options that allow users to spend their holdings may offer the best option.

Since many crypto investors employ jobs that still pay in fiat currencies, credit card options provide a way to use their income to make purchases, while continuing to make deposits without converting themselves to crypto.

Connected: Bitcoin payments for real estate gain traction as crypto holders seek to monetize

Legacy Network Will Finally 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 card holders spent more than $1 billion during the first half of 2021.

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

How this all lasts in the long run is anyone’s guess, but the current trend of cryptocurrency-related debit and credit card issuers shows no signs of slowing down. They are a tried and true marketing strategy used in industries large and small to help attract new users.

Want more information on trading and investing in the 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, so you should do your own research when making a decision.

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