• Gustavo Cepeda, Stephen Forgo, Stuart Smith
  • Published: 06 July 2021


As digital currencies move into the mainstream, the next step toward mass adoption is allowing people to use their crypto holdings to make everyday purchases. Currently, the easiest way to make frictionless purchases is by offering credit and debit cards that act as an offramp from the world of crypto into real world goods and services.s

For fintech companies operating in the crypto space, this is a logical extension of the custody and exchange services they already offer their clients. For more traditional financial institutions seeking to enter the cryptocurrency market, it provides a way to serve customer demand while playing on familiar ground. Financial institutions have an established credit/debit card infrastructure, which they can use to take leadership in the space. 

What is going on in the world of Crypto Cards?

Crypto Debit Cards

Crypto debit cards work just like regular debit cards but instead of using a fiat checking account they use your crypto wallet holdings. While all cards seem similar in nature, each company processes and handles crypto cards uniquely.

Let’s say you own Bitcoin in a wallet – the card will withdraw it from your wallet then exchange it for the respective transaction currency, like how foreign transactions are handled today. Coinbase,Wirex and Ternio debit from your crypto balance and automatically convert to USD at the point of sale. Other companies like BitPay and Fold essentially work like prepaid debit cards who offer rewards in crypto. 

You open an account by transferring fiat by ACH transfers and earn a percentage of the transaction back in a specific cryptocurrency. Some companies, like Coinbase, charge a fee to make the currency exchange. Some providers charge no exchange fees but may charge an annual fee. Wirex, a U.K. company, allows for multiple no-fee currency exchanges. 

The biggest hurdle for crypto debit card adoption is the reluctance of users to spend their crypto while the assets are surging in value. Cryptocurrencies, such as Bitcoin and Ethereum, have been appreciating so fast that most users would rather hold on to the asset than spend it. A second hurdle is that crypto transactions require an exchange to a fiat currency. The transactions are considered a taxable event by the IRS, which further dampens the appeal of using crypto as a medium of exchange. 

Companies who offer Crypto Debit Cards:

Coinbase, BitPay, Fold,, Wirex, Ternio, Paxful

Crypto Credit Reward Cards

Crypto reward cards function like regular credit cards but offer cashback rewards in Bitcoin or some other form of cryptocurrency. Crypto credit reward cards allow users to accumulate crypto through their everyday spending and are a good choice for newcomers to the crypto world who are looking to get some exposure to the asset class without investing any principle. Platforms that offer credit cards with crypto rewards allow companies to generate additional revenue using traditional credit lending while also offering users the ability to grow their crypto holdings. If cryptocurrencies continue to appreciate, expect that more customers will seek out credit card rewards in cryptocurrencies instead of the more traditional cashback or airline miles offered by card issuers.

Companies who offer Crypto Rewards Card:

Gemini, BlockFi,

Crypto Cards and the Financial Industry At Large

To date, the traditional finance world has taken a wait-and-see approach to crypto adoption. Recently, Morgan Stanley provided the opportunity for wealth management clients to hold Bitcoin in their portfolios. We can expect the trend of institutions offering access to Bitcoin and other cryptocurrencies to continue, meeting rising customer demand. 

Currently, many financial institutions see cryptocurrencies as speculative assets while some see the value of Bitcoin as an efficient store of value. Traditional financial players are still in the initial stages of planning a cryptocurrency strategy. Most financial institutions today lack the necessary infrastructure (exchanges, custody, block explorers) to deploy a crypto credit card. Established crypto firms, such as Coinbase, Gemini, and BlockFi, will continue rolling out crypto products that are comparable to legacy financial products in the marketplace. Visa has been the leading card provider for most of the crypto card issuance, however, Mastercard has planted its flag with its partnership with Gemini.

The race for the crypto card market has just begun; only time will tell which companies will take the market share and if the legacy financial players decide to get in the game. If financial institutions choose to remain on the sidelines, fintech companies will continue taking the business all the way to the bank.

At Capco, we operate at the intersection of finance, technology, cyber, and regulation. Every day we help our clients understand the critical elements required to deliver in the digital assets space. Together we can help you plan an effective digital assets strategy and implement the right technologies and partnerships to drive lasting transformation.