Among the many ways to adopt cryptocurrency on a large scale, including decentralized finance (DeFi), First layer protocol, Irreplaceable tokens with StablecoinFor the general public, perhaps the easiest and most applicable way is the ability to use cryptocurrency to make daily purchases through an integrated debit or credit card.
In 2021, more and more companies will provide cryptocurrency-based credit cards, giving holders the opportunity to use the value of their cryptocurrency to make daily purchases, but is this just the latest gimmick for companies to make money or is it a real sign of mass adoption?
Although the traditional financial sector does not have much discussion in this newsletter because it focuses on exploring the various sub-sectors of the cryptocurrency ecosystem, crypto assets are rapidly becoming a new investment category recognized by the global financial system.
Debit card utilization of crypto assets
It is important to clarify the differences between the card services provided by some of the biggest players in the game (including Crypto.com, BlockFi, and Coinbase).
It can be used in the United States, Europe, the United Kingdom, Canada, Singapore and the Asia-Pacific region.
— Crypto.com (@cryptocom) July 20, 2021
Coinbase Card and Encrypted debit card provided by Uphold Provide similar services, both of which provide usage rewards in the form of a percentage of each purchase and are paid in Bitcoin (Bitcoin) Or other cryptocurrencies, depending on the platform.
Being able to make purchases with your assets may help bring a good use case to the cryptocurrency ecosystem, but it also violates the “hodl” nature of many investors subscription Gresham’s law “bad money drives out good money in circulation”.
When it comes to which money is spent and which money is saved, in this case, good money or cryptocurrency will be saved, and fiat currency will be used for daily transactions.
Crypto credit allows holders to continue to accumulate
Like the recently launched credit card BlockFi Reward Visa Signature Credit Card There is no need to convert the user’s encrypted assets in advance to pay transaction fees. Instead, it provides credit lines with additional interest rates.
Gemini Exchange plans to provide a BTC cashback reward card On the MasterCard network. This is another example, which uses the traditional credit system method by providing incentives and charging interest on the carryover balance.
Users can use legal currency and get cash back rewards in the form of Bitcoins.
Paying in U.S. dollars while accumulating statistics is more in line with the idea of spending bad money in daily transactions and earning more cryptocurrency, but it does require users to have legal currency to spend.
In the case where someone only has cryptocurrency, they will be forced to convert part of their holdings into acceptable repayment methods, and taxable events may occur, depending on the law of their residence.
At present, the majority of the world’s population is either still using the traditional financial system or is Part of a large population without bank accounts Who is outside of all systems. The injection of blockchain technology and cryptocurrency either adds another step to the process or provides a new way for the financial network.
For diehard cryptocurrency fans who hold as much wealth as possible in cryptocurrency, allowing users to spend their debit card option may be the best option.
Credit: Financial Times pic.twitter.com/1dc0jJxvm3
-Blockchain assets (@BAXASSETS) December 30, 2019
Since the work of many crypto investors is still paid in fiat currency, credit card options provide a way to use their income to make purchases while also continuing to accumulate without having to convert to cryptocurrency on their own.
Traditional networks will eventually integrate blockchain technology
Visa and Mastercard have fully accepted the integration of cryptocurrency and blockchain technology into their networks. Visa recently reported that its cardholders that support encryption Spend more than $1 billion The first half of 2021.
In the near future, the entire network may be based on blockchain, and users will regularly interact with digital currencies without their knowledge.
Anyone is guessing how this will work in the long term, but the current trend of companies issuing debit and credit cards related to cryptocurrencies shows no signs of slowing down. They are an effective marketing strategy used in industries large and small to help attract new users.
Want to learn more about trading and investing in the crypto market?
The views and opinions expressed here only represent the views of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading action involves risk, and you should conduct your own research when making a decision.