As blockchain technology and public awareness of cryptocurrencies continue to grow, a number of new use cases will emerge and improve the effectiveness of legacy financial systems.
Despite its many uses, the original use case for Bitcoin (BTC) as a medium of exchange remains one of the most basic uses of blockchain technology, and while BTC may not be the best commodity for payments, there are service providers who have slacked off the process of processing transactions in other cryptocurrencies.
Currently, the most widespread way to use cryptocurrencies for direct payments in everyday life is to use crypto debit cards that allow users to convert their crypto holdings into US dollars. They basically work like a prepaid direct debit.
As institutions show increasing interest in the growing cryptocurrency sector and mainstream awareness of blockchain technology is at the highest level ever, crypto debit cards continue to grow as new players enter the field to take a share in this growing To conquer the market.
Three of the debit cards with a success story and attractive rewards are BitPay, Crypto.com and the Nexo Card.
The BitPay Prepaid Mastercard has proven to be the first choice for many cryptocurrency holders thanks to its ease of use and low fees. It was originally introduced as a US-only debit card in 2016 and primarily acted as a Bitcoin payment processor.
BitPay now supports eight different fiat currency options besides Bitcoin, Ethereum (ETH), Gemini Dollar (GUSD), USD Coin (USDC), Paxos (PAX) and Bitcoin Cash (BCH).
Have you already added your BitPay card to @Apple Pay®? Make online and in-store purchases easily with crypto. #apple #applepay #bitpay #bitcoin #bitpaywallet #bitpaycard #crypto pic.twitter.com/hRp7nm6vDu
– BitPay (@BitPay) February 23, 2021
Users who wish to receive the card must first pay an activation fee of $ 9.95 and provide their social security and driver’s license number to gain access. Once approved, the user can load cryptocurrencies onto their BitPay wallet and then convert them to dollars to make them available on the card.
There are no transaction fees for users in the United States and the card has a daily spending limit of $ 10,000 with a maximum account balance of $ 25,000.
For the avid cryptocurrency fan, the Crypto.com debit card is one of the first choices as it has a built-in native token called the Crypto.com Coin (CRO) that acts as the main currency and reward token for the blockchain.
The benefits of the card include 100% cashback on popular streaming services such as Netflix and Spotify and up to 8% cashback on regular purchases.
Crypto.com users can choose from a list of more than 100 of the top cryptocurrencies to fund their card by depositing it into their account and converting it into a stablecoin which is then loaded onto their debit card.
We are happy to bring you news from a historic moment: https://t.co/vCNztABJoG & @Visa have successfully completed the first transaction with USDC!
A major milestone for the industry as crypto and fiat networks converge. Https://t.co/v70qC8n4Yy
– Crypto.com (@cryptocom) March 29, 2021
The Crypto.com ecosystem offers five different Visa debit cards with a tiered reward structure that increases based on the amount of CRO a user has wagered on their account.
Tiers range from wagering $ 400 on the Ruby Steel card to wagering $ 400,000 on the Obsidian card, which offers 8% cashback on all purchases. There is also a basic version of the card that does not require staking and offers 1% cashback on all purchases.
A third choice, which has a different structure than most crypto debit cards, is the Nexo Card and its native NEXO cryptocurrency, which is currently trading at $ 3.63.
Instead of requiring users to convert the cryptocurrency held in their accounts to US dollars prior to use, Nexo will provide an instant loan based on the value of the cryptocurrency held in a user account and process the transaction in fiat currency.
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– Nexo (@NexoFinance) April 22, 2021
This allows users to access the value of their cryptocurrency assets without having to sell them. The loan can be paid back in either cryptocurrency or fiat through their Nexo account, with the minimum payment being paid out through the income from a user’s deployed cryptocurrency assets.
The interest rate on the fees on the card is 5.9% and there are no monthly or annual exchange fees. In addition, users receive 2% cashback in the form of Nexo tokens or BTC.
As more banks and institutions in the US and around the world enter the cryptocurrency sector to find ways to capitalize on the growing market, crypto debit cards are likely to become a more important part of legacy payment channels.
The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph.com. Every step of investing and trading involves risk, so you should do your own research when making a decision.