Crypto.com propose une carte de crédit sur un compte alimenté en cryptomonnaies – mais soutenue par l’établissement Visa. © Crypto.com

How do crypto cards work?

What are these credit cards that are based on an account fed with cryptocurrencies? Can we use them everywhere? How do they differ from traditional credit cards?

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[EN VIDÉO] Cryptocurrencies, how does it work?
Like Bitcoin, there are more than 6,000 cryptocurrencies in the world today. These currencies are based on blockchain technology.

It is common to consider that cryptocurrencies would be used above all to speculate. However, the primary utility of a currency is all the same to be able to pay, to buy goods. What about crypto? For years, various websites have accepted bitcoin payments, including Expedia, Subway, Twitch or Microsoft. And certain bars or stores accept this type of payment – a list of French brands is regularly updated on this page: https://bitcoin.fr/depenser-ses-bitcoins/. What is less known is that there are crypto-cards similar to the usual credit cards.

Demand for crypto cards came from users of the exchange platform Coinbase who wanted to use their assets in everyday life. In order to respond to this request, Coinbase therefore launched a card in the United Kingdom in April 2019. Then, in June 2019, this card was made available in the United States, France, Spain, Italy, Ireland, Germany and the Netherlands…) Now, there are a lot of providers offering such crypto-cards: Binance, Curve, Crypto.com, CryptoPay…

Crypto-cards accepted in almost all points of sale

Similar to a classic card, a crypto-card is accepted in almost all points of sale in the world. And it also allows you to withdraw euros from any ATM. It is also possible to use it for payments mobiles (Apple Pay, Google pay). The essential difference is that the account relating to a crypto-card, instead of being supplied in euros, is in a currency such as Ethereum, BitcoinBNB, CRO and other avatars.

How does this work in practice? Let’s say you walk into a bookstore, pick out a few books, then head to the checkout. Let’s say you made a purchase equivalent to 100 euros.

You take the card provided to you by Binance from your pocket to make the payment. You insert it into the terminal and type your PIN code. A debit of 0.03 ETH (Ethereum) is made in your account at Binance – the equivalent of 100 euros at the time of this writing. Binance converts this amount of 0.03 ETH into 100 euros which is paid to the trader through processing cryptographic. Note that other crypto-cards, and in particular that of Crypto.com, operate in “prepaid” mode: it is necessary to top up your balance in euros beforehand by selling cryptocurrencies upstream.

Visa and Mastercard support

One factor is able to reassure users of a crypto-card: they are supported by Visa or Mastercard. It just so happens that these institutions want to support the transformation digital financial services. Visa has also made it known that during the 1er semester 2021, the expenses incurred via crypto-cards supported by its brand have reached one billion dollars.

The advantages of a crypto-card

What are the advantages of having a crypto-card rather than a classic card? First, management costs are significantly reduced. The reliability of transactions is very high, due to the fact that the underlying technology (the famous blockchain) is extremely secure.

But that’s not all. Some crypto-cards come with bonuses or rewards, including cashback on purchases. At Crypto.com as at Binance, this cashback can go up to 8% if you are ready to “immobilize”, that is to say keep a certain amount in your account. This cashback is donated to cryptocurrency and therefore helps to grow your wallet with each purchase. For example, Binance rewards the user with a balance in BNB (his currency).

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