What are crypto cards and how important are they for the fintech sector?


Blockchain and cryptocurrencies have significantly changed the landscape of the global financial system over the past couple of years.

.

The hierarchy inherent in large traditional banking structures is forcing cryptocurrency services to sacrifice some of their open corporate principles and move on to issuing plastic cards, for example. This is done, first of all, for the sake of significantly reducing the risks of blocking transactions on the part of banks, various regulators and their intermediaries. Let's take a closer look at the pros and cons of crypto cards.

It is worth making an important clarification. Crypto cards in the post-Soviet space are still far from being so common even in the form of debit payment cards. This is caused, of course, by the archaic specifics of the post-Soviet financial regulators, which already impede the development of the fintech industry. And the blockchain with cryptocurrencies has not yet won a 100% leading position in the financial market of the post-Soviet territories, including Ukraine. Despite the fact that in 2020 there are over 50 million users of blockchain wallets. We are recommended to use kraken trading bot to make trading easier and more profitable.

Mastercard and Visa as an anachronism

Bank cards are one of the key elements for all types of financial relations between legal entities or individuals. The principle of an ecosystem of closed consumption of financial services is fundamental for payment systems that serve plastic cards. However, when collaborating with cryptocurrencies and blockchain, this ecosystem is no longer as efficient as it used to be. Simply put, the closed-loop ecosystem becomes an anachronism whenever it encounters the realm of cryptocurrencies. Leading financial regulators classify cryptocurrency transactions as high-risk, because of this, payment systems are forcing customers to pay an increased commission fee or refuse to provide services at all. Crypto cards should thus embed the consumer of cryptocurrencies into the usual financial hierarchy, simplifying key financial transactions. The volume of non-cash payments against the backdrop of the global pandemic has grown significantly, and for several years Visa has been issuing debit crypto cards. In 2020, she entered into a partnership agreement with the CoinZoom crypto exchange and the Eidoo platform. Visa Corporation also intends to develop its own digital currency using blockchain technologies. Mastercard, in turn, remains pessimistic about cryptocurrencies. As Mark Barnett, President of Mastercard Europe, previously stated, he does not believe that blockchain and cryptocurrencies will be the trigger for changes in existing payment systems. However, Bitpay partnered with Mastercard to issue a prepaid crypto card. In 2020, she entered into a partnership agreement with the CoinZoom crypto exchange and the Eidoo platform. Visa Corporation also intends to develop its own digital currency using blockchain technologies. Mastercard, in turn, remains pessimistic about cryptocurrencies. As Mark Barnett, President of Mastercard Europe, previously stated, he does not believe that blockchain and cryptocurrencies will be the trigger for changes in existing payment systems. However, Bitpay partnered with Mastercard to issue a prepaid crypto card. In 2020, she entered into a partnership agreement with the CoinZoom crypto exchange and the Eidoo platform. Visa Corporation also intends to develop its own digital currency using blockchain technologies. Mastercard, in turn, remains pessimistic about cryptocurrencies. As Mark Barnett, President of Mastercard Europe, previously stated, he does not believe that blockchain and cryptocurrencies will be the trigger for changes in existing payment systems. However, Bitpay partnered with Mastercard to issue a prepaid crypto card. he does not believe that blockchain and cryptocurrencies will be the trigger for changes in existing payment systems. However, Bitpay partnered with Mastercard to issue a prepaid crypto card. he does not believe that blockchain and cryptocurrencies will be the trigger for changes in existing payment systems. However, Bitpay partnered with Mastercard to issue a prepaid crypto card.

Crypto cards and their key parameters

  1. Crypto cards are issued by fintech startups. For the final financial consumer, this means the anonymity of the implementation of certain transactions, sometimes even without the possibility of verification.
  2. Fintech startups issuing crypto cards are often offshore. For the consumer of financial services, this means that there is no need to report to the tax service. However, as with any work with offshore companies, there are risks that must also be taken into account.
  3. Crypto cards as a means of saving. From the chain of financial transactions, such an intermediary player as an exchanger is withdrawn. Accordingly, the end consumer saves in this way by not paying a commission when exchanging currencies.
  4. Storage of fiat money.
  5. Binding to traditional bank cards Visa and Mastercard.

What is the result

Crypto cards have been the subject of serious discussions both in the fintech industry itself and among the players of traditional banking structures for several years now. For fintech startups that independently issue such crypto cards, it is important, first of all, to strengthen their own independence from some financial regulators who do not trust crypto exchanges. Meanwhile, for consumers of financial services, an increase in the volume of issuance of crypto cards looks like a significant plus due to the democratic approaches of fintech startups to customer service.

4211 Views