Сryptocurrency debit card is a special tool, the use of which greatly simplifies the work with crypto assets when investing in certain cryptocurrencies. Next, we will consider in detail the principle of operation of such cards and their purpose.
When a customer makes a purchase and pays with a cryptocurrency debit card, the seller receives the required amount in the form of fiat money issued by a particular state, for example, euros or US dollars. A regular debit card is linked to a bank account, while a crypto debit card is a prepaid instrument that can be funded using a crypto wallet.
If your card is replenished with cryptocurrency, then exactly how your assets will be transferred to dollars depends only on your card. In some cases, you may choose to hold your funds in cryptocurrencies until the moment of purchase, or you may need to convert the crypto asset into dollars or another currency in advance. The list of cryptocurrencies through which you can replenish your card also depends only on the debit card itself.
For entrepreneurs investing in cryptocurrencies, there are many potential uses for cryptoassets. Before you start using a crypto debit card, you need to consider the advantages and disadvantages of this tool.
When paying with a cryptocurrency debit card, you will be able to receive a certain percentage of refunds and accumulate them. It is worth noting that in some cases, when opening a card, you will need to select a certain type of it or deposit some specially established amount into the account initially in order to be able to receive the so-called “cashback” or, rather, “cryptoback” in the future. In any case, the return of a certain percentage of the operation is associated with some financial fees that were originally assigned to the card. Sometimes, these fees can be quite high.
Moreover, the second advantage is convenience. If you consider cryptocurrency as a daily financial instrument and would like to pay with it for any transactions, then having a crypto debit card is what you need. With the help of such a card, the user can withdraw his own funds from ATMs and receive a direct deposit.
High commission fees. Based on the type of card you use, your account may be charged commissions for the transaction itself, for the inactivity of the card for a certain period, for servicing a physical card, and so on. In addition, if you have, for example, two different crypto debit cards, you will not be able to withdraw funds stored on one through the other. The same can be said about cryptocurrency wallets. Some companies allow such transactions; however, they require large commissions for them.
The use of such a card may be subject to tax. The sale of cryptocurrencies to fund a debit card can be classified as taxable profit or loss. Funds flowing through ordinary debit or credit cards are not subject to taxation; however, it is not entirely clear whether this is true for crypto debit cards. In this matter, you should be extremely careful.
Lastly, the need to carefully track and record income and losses received from cryptocurrencies in order to reflect them in the tax return. If, when checking with the tax office, you cannot properly justify all transactions, you will find yourself in a very unpleasant situation.
If you already have a cryptocurrency wallet in one company, then the best option would be to open a debit card in the same company. However, it is worth considering that not all companies that issue crypto wallets can also offer services for the issuance of crypto debit instruments, or this option may be available only to some.
If you have several wallets managed by different companies, and each of them offers crypto debit card services, compare loyalty and savings programs – you should probably choose the most profitable provider. In addition, you need to compare the amount of commission fees and the terms of service of the card.
Even if you have only one option at your disposal to open a card, you may be faced with a choice between funding with a stable asset or a more volatile one. For example, a card backed by the US dollar and pegged to that currency will not face tax issues or be affected by fluctuations in the general market, unlike a less stable asset.
Whether you have a direct need for a crypto debit card depends on whether the card you are considering is worth the commission and other requirements put forward to maintain its functioning, as well as on the degree of your “immersion” in the crypto investment industry.
Definitely, if you need a way to convert your own crypto assets into cash, a cryptocurrency debit card is what you need. However, this is not the only option available: alternatively, you can use cryptocurrency credit cards or Checkout with Crypto from PayPal.
Just starting to work with cryptocurrency, try to start with a crypto wallet, and not immediately with debit or credit cards. Experiment with the cryptocurrency space to learn more about the very nature of crypto assets.
Crypto exchanges, exchangers as well as ordinary merchants are increasingly paying attention to the possibility of White Label issuing cards, such as cryptocurrency prepaid for their users in order to increase their loyalty and gain an advantage in the market by offering an additional financial instrument that users can use both within an existing project, as well as beyond. This increases loyalty to the project and allows you to attract additional investment and audience. Payment systems such as VISA and Mastercard already have programs for the issuance of cryptocards and allow principal members to issue these cards both on their own behalf and allow agents to brand and distribute them.
In order to get the opportunity to issue cards under your own brand, to connect the issue of prepaid crypto cards, please contact our specialists for advice.
The international company Eternity Law International provides professional services in the field of international consulting, auditing services, legal and tax services.