What Are Crypto Cards?

What Are Crypto Cards?

6 Min.

Crypto's appeal extends beyond its investment potential to include its ability to facilitate value transfers. For example, Satoshi Nakamoto's creation of Bitcoin was not solely aimed at making individuals wealthy but also at establishing a global digital payment system. To fulfill this objective, crypto cards have emerged as a practical solution, enabling people to integrate crypto and digital assets into their daily routines while also earning crypto rewards. Let’s take a look at how crypto cards work and which benefits they offer.


Crypto cards are similar to prepaid debit cards, but they also allow you to earn crypto rewards or convert your crypto into fiat currency for purchases worldwide. Mastercard and Visa offer crypto cards in certain jurisdictions. 

Crypto cards function similarly to traditional cards, requiring you to preload them with crypto before use. Licensed issuers like crypto exchanges or banks provide these cards. However, it's important to note that crypto cards come with risks, as the value of your funds on the card can fluctuate. In addition to that, transactions made with the card may be subject to taxation.

Still, crypto credit cards operate more like traditional credit cards, offering crypto rewards. You can settle your credit card bill with fiat currency while earning crypto bonuses based on your spending. 

Crypto Cards Definition

Functioning much like traditional debit cards, crypto cards facilitate payments at establishments that accept the respective card provider. Although it may seem like you are directly using digital currencies to pay the vendor, the reality is different. The vendor receives fiat currency in their account rather than crypto. When you use your crypto card, it accesses the cryptocurrency in your linked account, converts it into the local currency of the transaction, and utilizes that cash for payment. We will illustrate this process with an example later in this blog.

Both Visa and MasterCard offer crypto cards in collaboration with partner companies that obtain the necessary licenses. As the most widely recognized payment providers globally, their involvement ensures that retailers widely accept crypto cards. Some crypto cards exclusively offer rewards on purchases made with the card. Typically, these credit cards require a credit check during the application process.

Crypto Cards: The Principle of Work

When using a crypto card, the vendor is not directly paid with crypto; instead, the card conveniently converts your crypto into cash, which is then used for the transaction. To illustrate, let's consider a scenario where you have $500 worth of BNB in your cryptocurrency wallet. While dining at a restaurant and settling a $100 bill, you opt to use your crypto card. Upon inserting the card and authorizing the payment, the crypto card provider sells $100 worth of BNB and credits the equivalent amount in fiat currency to your card. Consequently, the restaurant receives the $100 payment, and you are left with $400 worth of BNB in your wallet. This entire process takes just a few seconds when utilizing your crypto card.

In addition to making purchases, certain service providers support ATM withdrawals using crypto cards. The exact conversion method described earlier is applied to convert your digital assets into physical cash for withdrawal purposes.

Crypto Cards vs. Debit Cards: What’s the Difference?

When comparing crypto cards to traditional credit and debit cards, there are some subtle distinctions, although their payment functionality is mainly similar. The main disparity lies in how funds are loaded onto each card. While a crypto card requires cryptocurrency as its loadable asset, a debit card is pre-loaded with fiat currency, and a credit card settles transactions with fiat currency at a later date.

A prepaid crypto card functions akin to a conventional debit card, necessitating the presence of funds in your account before making purchases. However, it diverges because you can only load cryptocurrencies onto the card, not fiat cash. When a payment is made, the funds from your crypto wallet are instantly converted.

On the other hand, crypto credit cards provide a credit line, enabling immediate purchases with subsequent payment. Gemini and BlockFi have introduced crypto credit cards with crypto cashback benefits. The credit card bill is settled using a standard fiat currency, effectively rendering the crypto credit card akin to a rewards credit card.

To obtain a crypto card, you must be a customer of a company that offers such cards, such as a crypto exchange or a bank that supports crypto transactions. The process entails completing the necessary Know Your Customer (KYC) and Anti-Money Laundering procedures, similar to obtaining a regular credit or debit card. Additionally, a credit check is required for crypto credit card applications.

Benefits of Crypto Cards

The convenience of using your crypto for everyday purchases is a primary advantage of prepaid crypto cards. In the past, this was challenging unless vendors directly accepted crypto, and even then, transactions involving certain coins could take up to 30 minutes to confirm.  Moreover, the volatile nature of crypto prices meant that you might end up paying more or less than anticipated.

Additionally, many crypto cards provide enticing perks such as cashback rewards and discounts on popular subscriptions like Spotify or Netflix. These incentives, akin to those offered by standard debit or credit cards, serve as an attractive factor for choosing a particular card provider. 

It is crucial to compare the benefits offered by each card to determine which one suits your needs best. Also, remember to consider any potential exchange fees that may apply during the conversion process.

Common Risks of Crypto Cards

It's important to understand that owning a crypto card entails the same risks as holding cryptocurrencies. For example, when you load your account with Bitcoin (BTC) or Ether (ETH), the fiat value of your account will constantly fluctuate, meaning that the actual amount of money in your account may differ from your initial expectation due to exchange rate variations.

Additionally, it is crucial to be aware that in many tax jurisdictions, the act of spending crypto is considered a taxable event. This applies regardless of whether you're making a small purchase like a coffee or a significant one like a car. If you have accepted any gains or losses on your crypto prior to using it for a purchase with your crypto card, you will still be required to pay taxes or account for the appropriate taxable amount. One way to circumvent this issue is by using your crypto card to purchase stablecoins, which tend to maintain a steady value in relation to a specific asset. By doing so, you can avoid the price fluctuations associated with other cryptocurrencies.


When you find yourself owning crypto assets that you no longer wish to hold, a crypto card provides a convenient solution for converting them into fiat currency. Without a crypto card, you would typically go through the conversion process and manually transfer the fiat to your bank account. However, this can be time-consuming and take several days, depending on your bank and cryptocurrency exchange. As a convenient alternative, a crypto card emerges as one of the swiftest methods to utilize your crypto for making purchases, which is undoubtedly an important benefit. Nevertheless, it is imperative to maintain accurate records of your spending for tax purposes.

Crypto Cards
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