A crypto card is an analog of a bank card. It differs in that cryptocurrencies (Bitcoin, Ethereum, LiteCoin and others) are held in the account, rather than fiat currencies (ruble, dollar, euro). The card can be used to pay for purchases in stores and services in other places. However, there are many details which are worth knowing.
This article will explain how crypto cards of 2021-2022 work, to whom they are available, and what the limitations are. And most importantly, we'll look at the reasons to use them in the first place, and whether it's worth getting a cryptocurrency card in 2022.
Let's start by looking at the basic principle of how cryptocurrency cards work:
- The cardholder deposits a cryptocurrency into his or her account. This can be classic currencies like Bitcoin, or stablecoins (cryptocurrencies with rates pegged to fiat currencies - ruble, dollar, etc.), such as USDT.
- Cryptocurrency is stored in an account. Just like rubles in a bank card account.
- At the time of payment, the cryptocurrency is converted into fiat currency. For example, if you need to pay 100 rubles, the cryptocurrency in that amount is drawn from the account. First there is an exchange within the system, and then the merchant receives fiat currency.
Thus, the cardholder spends the cryptocurrency, but the account of the recipient (for example, the store) is credited with regular rubles or dollars. Because of this, cryptocurrencies can be used even in countries where paying in cryptocurrency is prohibited, for example, in Russia. After all, payments are made in fiat currency.
Cryptocurrency cards are used for many reasons. Common scenarios are:
- A person doesn't want to use state currencies. It doesn't matter what the reasons are, it's up to him or her. The user simply may not want to have rubles, dollars, or other fiat in the account. In this case, he can keep his funds in cryptocurrencies. However, not all countries accept cryptocurrencies. A cryptocurrency card solves this problem. A person holds cryptocurrencies only, yet has no problems when he needs to pay for purchases or services.
- A person keeps funds in cryptocurrency, expecting growth. Let's say the user expects Bitcoin to skyrocket in value and wants to make the most of it. In this case, he decides to keep all his savings in cryptocurrency without leaving a penny in fiat money. But he still has to pay for goods and services, and the cryptocurrency card comes in handy. When you use it, exactly as much cryptocurrency as you need to pay will be exchanged for fiat. Everything else is left untouched.
- Cryptocurrency card is more useful than traditional bank card. For example, interest can be regularly charged on the funds stored in the account. Or the company issuing the card may provide discounts when paying for services (e.g., cashback for Netflix or Spotify subscriptions). The more cryptocurrencies appear in the market, the more diverse their terms become. This provides an opportunity to choose an offer that will be beneficial for a particular user.
There are other cases as well. For example, some people use cryptocurrencies to avoid being charged by government services, like court enforcement officers. Still, it's difficult to find out if this behavior is legal, so it's not advisable.
In fact, the crypto card simplifies the conversion of cryptocurrency into fiat money when you need to pay in rubles or dollars. If you don't have a card, you have to go to an exchanger every time to convert funds. Therefore, a cryptocurrency card is a multi-purpose tool for everyone who keeps funds in cryptocurrencies but cannot pay with them directly (for example, due to the illegality of such transactions in the country of location).
There are a few nuances to be aware of:
- Crypto cards work together with Visa and MasterCard. Accordingly, you can pay with them almost everywhere (offline and online stores, cabs, hairdressers, restaurants, etc.), just like with traditional bank cards.
- Many crypto cards work only in certain countries. If you try to use it in any other country, the transaction will be rejected.
- The owner of a cryptocurrency card is not anonymous. In order to obtain it, you will have to provide personal information, which will be stored in the organization that issued the cryptocard. Therefore, if law enforcement officers need to find out who made the transaction, in most cases they will be able to do so.
Companies issuing cryptocurrencies in 2022 can be roughly divided into three categories:
- Coinbase, Crypto.com, Binance and other cryptocurrency trading platforms that issue cryptocurrencies. These platforms are not just exchangers, but large services where people buy and sell currencies. They are primarily designed for regular transactions, like trading (so called the speculative process of buying and selling assets in order to profit from exchange rate differences). However, many users also use them to store their own assets.
In this case, the cryptocurrency account is linked to the user's account on the trading platform. At the time of payment, the desired amount of cryptocurrency is exchanged for fiat money and transferred to the recipient. The disadvantages include the volatility of cryptocurrencies.
Volatility is defined as rate fluctuations over a small time period. Volatility is higher on trading floors. The rate is likely to "drop" a lot at times. If you pay by card at an unfortunate moment, more money will be debited than, say, if you pay the same amount in a minute.
- Systems like AdvCash. In this case the user has a crypto card and a few accounts. You can choose which one will be used for conversion of cryptocurrency into fiat money. For example, it's possible to convert Bitcoins to euros or dollars. After the conversion, the funds are sent to the cryptocurrency.
This way is actually similar to the use of a third-party exchanger, as the user first converts the cryptocurrency into fiat, and then the funds are sent directly to the card. However, the exchange is performed quickly and in one place.
- Companies that specialize on issuing crypto cards, including Betconix, TTM, and CryptoPay. The user installs an app on his smartphone, where he manages his accounts. He has a cryptocurrency wallet, a fiat account and a cryptocard at his disposal. All in one place, in a convenient and simple form. Both cryptocurrencies and dollars or other fiat currencies can be held. Typically, the fee after conversion can be seen in advance. The exchange of cryptocurrency into fiat money takes place right at the moment of payment.
Disadvantages include restrictions on the maximum amount that can be stored on a crypto card (most companies have them) and spending limits (for example, there may be a limit on the maximum amount that can be spent within a day or month).
Let's take a look at popular cryptocurrency cards that are considered to be the best in the current reality. Both by users themselves and experts. These are the ones to keep in mind if you choose a cryptocurrency card for personal use.
A service that has been in operation for about 10 years. AdvCash crypto cards operate in many countries. There are virtual and physical (plastic) cards. As for cryptocurrencies, you can store Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Ripple, Tron, 0x, as well as stablecoin USDT. At any time crypto can be sent to a fiat account, and it is converted into dollars, euros or other currency at the current exchange rate. The reverse conversion is also possible.
At the time of writing this article, the company has temporarily suspended the issuance of cards, but it is expected to resume soon.
The company's cards were launched last year, and quickly gained popularity. They support about 80 cryptocurrencies, and the number is constantly expanding. It is possible to convert crypto assets into fiat currencies and back at any time. There aren't many reviews yet, but according to the first reports from users, the card deserves attention.
TTM is a full-fledged cryptocurrency-oriented bank. The abbreviation in the name stands for "To The Moon" (a slang expression in the cryptocurrency community that denotes the expectation of rising cryptocurrency prices - "the price is flying to the moon"). The design of the card is appropriate - it shows the surface of the moon.
These cryptocurrencies are available in a large number of countries. The bank operates under the legislation of the European Union. The list of supported cryptocurrencies is small - USDT, BTC, ETH, TRX, BNB.
Cryptocurrency from Binance - the largest platform for trading cryptocurrencies, which is actively used by Russian users. For now, it's not available in the Russian Federation and neighboring countries. However, the opportunity to order it should appear in the near future.
The management of the company promises no service fees, a link to an account on the trading platform, and many other things. All the same, Binance is the leading platform at the moment, so it can afford to provide a large list of benefits.
A company with a 5-year history. It issues crypto cards for many countries, including Russia. The card doesn't have any specific advantages, but it is actively used by several Russian citizens.
It's one of the most popular companies issuing plastic cryptocurrency cards. Standard conditions:
- free issue of "plastic";
- 0.5% cashback for expenses;
- cash withdrawal fee - 2%.
However, there are different rates, and their conditions vary, which allows the user to choose the best offering.
A cryptocurrency card that is free for users from 179 countries. However, to use it profitably, you need to buy and store your own AMN cryptocurrency. In return - 24-hour technical support, cashback, no fees for cash withdrawals from ATMs.
- Before ordering a cryptocurrency card, make sure it works in your country, and in the countries you plan to use it while traveling.
- Study carefully and don't violate the terms and conditions to avoid being blocked.
- Don't deposit large sums of money into your card account until you've passed the full identity verification process.
- Compare the exchange rates of the company you've chosen with those of other services - don't worry if they are worse for you.
- Make sure you have all the documents that the company requires for identification and ID verification.
- Examine the fees - for exchanging cryptocurrency into fiat money, for withdrawing money, for not being active for a long time, for maintenance and others.
- Available spending limits per day/month are subject to change - check regularly for policy updates.
- Don't keep all of your funds in one company's accounts.
- Create strong passwords and use 2-factor authentication.
- Don't try to use cryptocurrencies for illegal activities and trading illegal goods - with this card, you are not anonymous.
- Be prepared for the fact that at any time there may be a problem with payment and have a backup, like always carrying a small amount of cash with you.
These rules will help to avoid most of the possible problems that are often described in the reviews of real crypto card users.
After choosing the best cryptocurrency card with the terms offered, it's worth considering whether it makes sense to order one. The field of implementation of such cards, although they have already been around for a few years, is at the initial stage of development. So far, everything works unsteadily, and at any moment unforeseen difficulties may arise. For example:
- The operation of the company may be restricted by the government.
- The conditions for using a card that has already been issued may change dramatically.
- In case of failure or error, it will take longer to solve the problem through technical support than it would be with a traditional banking organization.
Specialists recommend refraining from using cryptocurrency cards if there is no urgent need. So far, they create more problems than conveniences for the average user. After studying the reviews, you may find that:
- Most cards have high fees. One has to pay for issuing "plastic", account maintenance, and the conversion of cryptocurrencies into fiat currencies. There may be other fees as well.
- The card is not always possible to pay with. The payment may not go through in some places. For example, due to the fact that the company that issued the crypto card has no agreement with the beneficiary bank. That is, all organizations that issue cryptocurrency cards have an agreement with Visa and Mastercard, so the payment should be accepted. However, if the beneficiary bank (where the account of the store or restaurant where you are trying to pay) is not cooperating with your company, the transaction will be rejected. And you will have to find other ways to pay.
- There are problems with mobile apps. For example, last year the TRASTRA app, which makes cards for a number of countries, didn't work for half a day. Users were unable to pay with their card, and could not withdraw money to other accounts.
- Unexpected account blockages. Cryptocard holders face this problem much more often than traditional bank card holders. The reasons can be of any kind, from a system error to changed company rules or state laws.
That's why it's better to give up ordering a cryptocard for now, no matter how progressive and interesting it may be. Yeah, there will be profitable and comfortable offers in the market in 5-10 years, and the work of the sphere will be normalized. Still, in 2022, experts recommend abstaining - you do not need unnecessary problems. Moreover, it's possible to exchange fiat money for cryptocurrency, or vice versa, sell digital assets for fiat, without a cryptocurrency card. For example, through Broex.
Broex is a cryptocurrency exchanger and wallet officially registered in Estonia. The company has passed the inspections of regulators and has received a license. This made Broex a 100% legal way to store and trade cryptocurrencies. By working with the exchanger, you can be sure of the safety of funds and reliability of the company.
The advantage of Broex is the provision of a custodial wallet, convenient for beginners and experienced users. Purchased cryptocurrencies do not need to be withdrawn to third-party wallets. They will be stored in accounts that the company supervises. At the same time, you will have round-the-clock access to the assets through your personal account.
Storing cryptocurrencies with Broex is even more convenient and reliable for an inexperienced user than using classic cryptocurrency wallets.
Broex also offers:
- Login to your personal account via the website or mobile app. Using a PC is not necessary. By installing the app on your smartphone, you will be able to buy and sell cryptocurrencies from anywhere.
- Round the clock technical support. If you need advice, or there is a problem - you can contact the operator. In most cases, the resolution of difficulties takes no more than 5-10 minutes.
- Large selection of cryptocurrencies. You can buy not only Bitcoins, but also more than 40 other virtual currencies, as well as more than 2,000 digital tokens.
- Low commissions. Starting at 0.1% per transaction. Commissions are practically unnoticeable, and there are no commissions at all in some cases
- Simple interface. One of the most important advantages. Broex was created so that even a newbie could use the exchanger. It takes no more than 10 minutes to figure out how to buy cryptocurrency for the first time. Subsequent transactions will take less than a minute.
- The deposit is replenished instantly - with a bank card or through the system AdvCash. You can deposit from 1500 rubles (including in dollars or euros). Therefore, you will be able to invest in cryptocurrency even for a small amount.
Register to have access to Broex exchanger and Broex wallet. The procedure is simple and takes less than 5 minutes. In case you have any difficulties - write to the online chat so that a tech-support specialist can help you figure it out.