Blockchain and cryptocurrency technology are both alluring and confusing because they are digital systems. A tokenholder cannot show a physical MGX token to a friend; instead, they show their digital wallet. Furthermore, cryptocurrency transactions occur on exchanges. For the mild enthusiast, such large scale applications are hard to grasp. What clicks is a tangible example that they already understand: cryptocurrency credit cards.
There’s magic in the beep and almost instant deduction of funds because it reflects the seamlessness of the underlying technology and implies that it is ready for greater adoption. There are already a few notable competitors in the space with working products, exciting even the crypto enthusiasts who can live that dream of living purely off their tokens.
The Frontrunners
While there are several entrants to choose from, we give two well-known companies that are paving the way in this space.
TenX is based in Singapore, enabling everyday on-the-go purchases through their TenX cards. The cards can now be bought by residents of Singapore, Australia and New Zealand. Linked to the TenX wallet, the cards support multiple cryptocurrencies and allow ATM transactions anywhere in the world. The card is particularly handy for travellers as they can spend at over 42 million VISA payment points, lock their card when not in use and not have to think about exchange rates across countries.
Monaco’s wallet and card allow users to buy, sell and pay with crypto. There are several cards according to the required holding of MCO tokens: Midnight Blue (0 MCO), Ruby Steel (50 MCO), Royal Indigo and Jade Green (500 MCO), Icy White (5,000 MCO) or Obsidian Black (50,000 MCO). The increasing lockup promises better cashback rates with Obsidian Black at 5%. Card holders have access to VISA’s over 42 million points of sale. These cards are not yet available.
Major Hurdles
The road to a fully established crypto card is by no means a walk in the park. Regulations like KYC laws are not always compatible with such blockchain products which by their nature are decentralized and anonymous to some degree. This regulatory risk has not stopped major payment gateways like Visa to jump on the bandwagon and grant access to its over 42 million points of purchase. Instead, KYC laws limit the locations where these cards can be distributed and leaves areas like Canada and United States without access.
Compared to regular credit cards, crypto cards have the advantage of lower fees. Comparing apples to apples, we know that crypto cards facilitating crypto to fiat transactions still incur higher fees than crypto to crypto transactions. The current compromise is for crypto cards to charge a small premium for the use of the Visa network. However, once adoption levels pick up, crypto credit cards could see reduced fees.
While this may seem like a chicken and egg problem, having companies like TenX and Monaco work on the supply side issues first can help reluctant prospects make the switch to a crypto-enabled card.
