Ask the Orb: What are crypto debit cards, and how do they work?

3 min readJan 18, 2022

As cryptocurrency grows in popularity, it is evident that we are entering a new financial era.

Early cryptocurrency supporters hailed the digital currency as the start of a big transition away from the old form and structure of money and toward a totally decentralized one. In essence, early adopters accurately anticipated that cryptocurrency would become as legal as ordinary fiat cash. What they may not have expected is the trend toward legitimizing cryptocurrency through standard financial instruments.

Recent events demonstrate the tenacity of legacy finance. One of the most interesting developments at the crypto-verse and traditional banking intersection is cryptocurrency-funded debit cards.

What is a crypto debit card?

While most of us understand what a debit card is, it’s still important describing because a crypto debit card works on the same principles. A debit card is a plastic card that contains your account information through a chip or scannable barcode. Unlike a credit card, a debit card allows you to pay for products or services online using the funds in the connected account.

A debit card, in essence, connects processing firms to your checking account, allowing retailers to process payments using funds in your account.

On the other hand, a crypto debit card is exactly what it sounds like. A bitcoin debit card links a cryptocurrency payment processing firm to your cryptocurrency wallet. This sort of card allows you to use the monies in your crypto wallet to settle transactions at any merchant that accepts debit cards.

Also Read: BTC and how it affects the general market

How do crypto debit cards work?

So, now that we’ve covered the fundamentals of crypto debit cards let’s take a closer look at how they function.

To begin with, there are still limits to using cryptocurrencies in the real world today. You can’t just stroll into any shop and pay for your order with Bitcoin since most shops refuse to take the cryptocurrency.

Retailers are wary about digital currencies for a variety of reasons, including payment processors’ unknown legal status, exchange rate volatility, and the general public’s still-underdeveloped understanding of blockchain–the technology that enable cryptocurrencies.

Fortunately, cryptocurrency debit cards and other “conventional” financial products are attempting to further establish cryptocurrencies as legitimate forms of payment. How do they accomplish this? Here’s an illustration:

John enters a nearby coffee shop, which, like others, takes debit cards. Because a crypto debit card functions similarly to a debit card issued by a bank, John can use his traditional debit card or the fresh new crypto-based debit card.

John decides to put his crypto debit card to the test. While the coffee shop does not accept cryptocurrencies, it does accept debit cards. The cashier hands John his coffee, swipes his credit card, and delivers his receipt.

When the cashier swiped the card, the processing business accessed the card’s crypto wallet and removed the dollar amount of cryptocurrency required for the cup of coffee.

The crypto was then transformed into conventional fiat cash by the processing business and transferred directly to the coffee shop’s account. This all transpired in a matter of seconds, highlighting another way in which cryptocurrency is becoming a more accessible means of payment in the real world.

Also Read: PrivacySwap DEX Playbook

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