What are cryptocurrency cards?

What are cryptocurrency cards?

By bit.team

MasterCard and Visa are two different financial services that are currently actively involved in the banking game, providing millions of customers with access to their credit and debit cards. You will be surprised to learn that there is now another alternative, and you can use it if you want.

Cryptocurrency cards have become a reality, and MasterCard and Visa issue such cards, but it depends on your region and the sanctions imposed on cryptocurrency in that particular region. A crypto card works the same way as a debit card, where in order to spend money, you need to deposit it to an account linked to the card, or, in this case, cryptocurrency.

You can get your crypto card either from a bank or a crypto exchange, depending on your preferences or the issuers that are currently available in your country. The only nuance of these cards is that it is, in fact, the same cryptocurrency, which means they are subject to extreme volatility.

The cryptocurrency you store on these cards may lose its value or grow over time as the market continues to fluctuate, and any transaction you make with the card is taxed, which means that the government will receive its share for every time you use the card. The incentives are almost the same as when using credit and debit cards, for example, if you use your crypto card for certain transactions and pay for certain services, you can get additional rewards and bonuses in cryptocurrency.

Real-world Examples of Using Crypto Cards in the Real World

Cryptocurrencies and decentralization are not old concepts. A decade has passed since the launch of Bitcoin as a flagship cryptocurrency, and since then, according to Coinmarketrate.com, many other cryptocurrencies have been released on their individual blockchain systems. People have learned a lot about the use of cryptocurrencies and decentralization. At the very beginning, this whole concept was frowned upon, but as the movement towards improving the financial system of the world continued, and cryptocurrencies played an important role in it, people and financial enterprises began to accept cryptocurrencies more along with decentralization.

Now they are not considered a means where people can simply invest their money; it is something that can be used as a store of value to buy other goods and services or transfer value from one person to another. The very idea of creating Bitcoin was to use it as a global financial element, where digital payments could be carried out in a much more orderly way. Crypto cards simply help people interact better with cryptocurrencies.

The very aspect of buying cryptocurrencies on exchanges and going through all the tedious tasks of acquiring cryptocurrencies can simply be excluded if you use cryptocurrency cards. With these cards, people can use cryptocurrencies in their daily lives, and if they wish, they can simply convert them into cryptocurrencies for their financial needs, since these cards can help them buy goods, services, convert cryptocurrency into fiat and even vice versa.

The reward system, as explained earlier, is almost the same as that of other debit and credit card organizers. When you use a crypto card in certain places, you will receive prizes and cashback in cryptocurrency credited directly to your account. This incentive has helped issuers of crypto-cards to sell them in large numbers over the past few years, and even now the volume of sales is growing quite intensively.

How Crypto Cards Work

As explained earlier, a crypto card works the same way as a debit card, which means that in order to use it, you need to top up the card with cryptocurrency. Now, when you make a purchase with your card, the protocol responsible for conducting the transaction converts/unfreezes your cryptocurrency into standard fiat. Whatever the current exchange rate, your cryptocurrency will be converted accordingly, and the seller will receive fiat money, not cryptocurrency.

This is very important to understand, because many believe that they will receive cryptocurrency to their accounts, but in fact this is not the case. When it comes to applying for a crypto card, you can do this by contacting intermediaries, say Visa or MasterCard. These companies provide people with access to crypto-cards, but not directly, but provide these cards to partner companies who want to obtain a license from one of these organizations.

Crypto cards are available through partner companies. The crypto cards that you will receive from any of these intermediaries will be accepted everywhere and can be used to pay for any goods or services that you want to purchase. Some of these cards will also provide you with valuable cashback and certain rewards for the money you spent using this card. Most of these cards are credit cards, which means that you will have to pass a credit check to apply for one of them.

As has been explained many times before, the crypto card will not pay to any specialized provider in cryptocurrency. There is an appropriate mechanism for this. It is associated with a potential wallet containing various cryptocurrencies, and it can be anything, for example, Bitcoin, Ether or even XRP. As soon as you initiate a request for a certain transaction, the algorithm present in the card is activated, and it first of all converts the cryptocurrency that you have on board and that is present in your crypto wallet into a fiat alternative, and this money is paid to the seller or retailer from whom you buy goods or services.

Now you may be wondering, what about exchange rates? This is a very good question, because, as it happens, cryptocurrency is an extremely volatile structure, which means that its prices will change within a few days, not weeks. Whenever you make a request for a certain transaction, the cryptocurrency in your wallet will be converted into a fiat currency representing the most recent conversion rates of this cryptocurrency to fiat on that particular date. There is also a positive side to owning a crypto card – you can use it to withdraw money from ATMs, but you may have to clarify this issue with your service providers beforehand.

The main differences between a crypto card and a debit or credit card

There are only a few minor differences between crypto cards and credit and debit cards. These differences are not in the principle of their work, which remains unchanged in all cases, but in the value proposition that is used to conduct transactions.

When it comes to using the funds available in the account, all these cards work the same way. Whenever you need to pay for something, the same mechanism comes into play in all these different types of cards, and in this they are all similar to each other. The difference arises in the financial value that the cards use. In the case of credit or debit cards, fiat currencies related to a specific region or country are used.

While crypto-cards use cryptocurrencies. The range of cryptocurrencies can be exceptional, since several cryptocurrencies, such as Bitcoin, Ether or XRP, can be loaded onto the card at the same time. All of them will be distributed into separate classes with corresponding balances, to which the user will have full access. To identify some differences between credit and debit cards, you need to know that a special fiat currency is preloaded on the debit card. As for the credit card, at the end of each month you repay the remaining debt.

There is a practical limit, if exceeded, the bank will cover all your expenses, and as soon as the limit is exceeded, the card will be terminated. Crypto cards are mostly prepaid, which means you’ll have to stock up on cryptocurrency to make it all work.1 You must have some amount of cryptocurrency on your card before making it work. You cannot use fiat currencies to replenish your crypto cards, but when it comes to paying for certain services and goods, the cryptocurrency already in your crypto wallet linked to the crypto card will first be unfrozen or transferred to a fiat analogue and only then will it be used for a certain operation.

Speaking of cryptocurrency credit cards, you should be aware of the processes and pre-checks that you may have to go through before accessing them. You may have to pre-pass a credit check on a certain crypto exchange or with a partner licensed by Visa or MasterCard before you can access a credit card. In addition, the user must be checked for compliance with the principles of “know your customer” and “anti-money laundering” so that the exchange knows that the user is legal and not involved in money laundering or any other such humiliating activity.

A crypto credit card gives you access to a certain amount of finance, just like a regular credit card, and at the end of each month you have to pay the remaining debt on your crypto credit card, which can be done using fiat currency. Make sure that your credit score is within the normal range, if not phenomenal, in order for you to be allowed to subscribe to a cryptocurrency credit card.


When it came to using cryptocurrencies for everyday purchases, there was a clear and distinct failure. People were only interested in the idea of decentralization and investing in cryptocurrencies for the sake of large incomes that they will be able to receive in the near future, that’s all. With the advent of technologies and crypto cards, it has become possible to use crypto for everyday purchases when buying goods and services from retailers and sellers around the world. And this is by far the most amazing advantage of owning a crypto card.

Previously, during the period of decentralization and the formation of cryptocurrencies, you could use cryptocurrency for payments only if the seller in question really accepted this cryptocurrency. For example, if the seller accepted Bitcoin and you had Ether, then you had to convert your Ether into Bitcoin, and this process was very tedious and complicated. Crypto cards allow you to use any cryptocurrency that is stored in your crypto wallet at the moment, and then use this cryptocurrency to make a transaction. The main mechanism is to convert cryptocurrencies into fiat currency, while the seller or retailer receives payment in fiat, not in cryptocurrency, that is, they may not even accept cryptocurrency, but you will make a purchase using your cryptocurrency.

When using cryptocurrency cards to make transactions, there is a certain reward in the form of cashback, which can also be associated with other benefits associated with decentralization. There are many crypto card providers, and for each of them, the reward and cashback are slightly different and unique. That’s why make sure that any provider you work with has a potentially attractive set of benefits for you.

Last but not least, the advantage of using cryptocurrency cards is that you will be able to benefit from the extreme volatility of these cryptocurrencies. Don’t get it wrong: volatility simply means a change in the value of an asset over time, that is, it can fluctuate up, which means its growth, or down, which means its decline. Therefore, if the cryptocurrency that you currently own has a lower value, then there is a chance that in the future its value may increase, and along with it, the total return on investment will increase in parallel.

It’s worth thinking about: if you don’t use cryptocurrency for everyday purchases, you can make a small investment in your crypto card, for example, link a crypto wallet to the card, which stores several cryptocurrencies. You don’t have to use it for shopping or anything else. Just wait, and when prices rise in the future, the value of your cryptocurrency will also increase.


There is also a downside to owning cryptocurrency cards, which is that the cryptocurrency loaded on the card may fluctuate in price. The same thing that was explained earlier as an advantage can become a disadvantage if the value starts to decline and you start losing the potential volume of the price of a crypto asset. This means that the cryptocurrency that you currently hold on your crypto card may fluctuate in price, and with it the final fiat balance of your account. This also means that there may not be a certain amount of fiat money in your account, as you think, because the cryptocurrency exchange rate is constantly changing, and with it the total cost of the account.

You will have to familiarize yourself with the current exchange rates of various cryptocurrencies; only then will you be able to get a potential estimate of the net value of your account. Another disadvantage is that whenever you make a transaction using a crypto card, you are charged a transaction fee, and sometimes it is taxed.

This means that no matter how minimal or exaggerated the purchase you made with a crypto card, the government will receive its share in the form of taxes. You can completely avoid this problem by using stable coins instead of traditional cryptocurrencies, since their value rarely changes and is relatively more synchronized with current fiat currencies than cryptocurrency alternatives.