The number of cryptocurrencies now exceeds 5,200, according to Investing.com, evidence that cryptocurrencies are increasingly viewed as viable stores of value. However, the technology that supports Bitcoin, Ethereum, Binance Coin, and Dogecoin trading has some inherent limitations. Even the most popular cryptocurrencies today are not easily accessible for everyday transactions like buying a cup of coffee.
Using the power of existing debit and credit card infrastructure, the gap between digital assets and traditional payment systems can be bridged, making crypto a more viable form of payment. Previously, attempts to use cryptocurrency as a real form of payment faced many obstacles. Until recently, account holders had to sell their cryptocurrency for fiat on the market, then wait for the funds to reach their bank account in order to spend it. Cards can now minimize this hurdle by adding a new channel of use. Card program owners should pay close attention.
Debit and credit cards can give crypto transactions just what they lack: fast transactions on existing payments systems, single-handedly revolutionizing the utility of cryptocurrencies. The result is a more actionable form of payment that can be used for both large and small daily transactions with ease.
Cryptocurrencies are entering the mainstream, with at least 6% of Americans reporting owning or transacting with crypto tokens in 2020. We have also seen early signs of adoption from some of the world’s most renowned organizations. The financial industry is evolving in parallel. Many market leaders have entered the space by providing crypto cards, which deliver the smooth transactional performance that cardholders demand.
Take, for example, household name and payments leader Visa, which has joined the sector with several different cards — most notably with a Crypto.com-branded Visa debit card and Bitcoin Rewards Card. They have stated their intention to directly connect some cryptocurrencies to the Visa payment platform, which is a powerful signal of their expectation of crypto adoption and daily usage. Mastercard has also announced that it will support direct interactions between crypto assets and their system. Visa alone has reported partnering with 50 of the top crypto platforms on payment cards, including ones powered by Marqeta.
PayPal has made visible steps to follow suit. It already supports the purchase, sale, and storage of some tokens on its platform, and it just recently announced that it will power checkouts on their platform using crypto. We at Marqeta are also making strides towards offering cutting-edge financial solutions for cryptocurrencies. Marqeta is powering the U.S. launch of Coinbase Card, the Shakepay Card in Canada, and Fold, a bitcoin rewards debit card.
Even some central banks are dipping their toes into digital money. The Federal Reserve of the United States and its equivalents around the world are investigating and developing national digital currencies, referred to as Central Bank Digital Currencies (CBDC). While nothing has been announced in concrete terms yet, it’s increasingly likely the future of currency may be digital. Consumers have shown their interest in crypto and financial service providers will continue evolving to meet this need.
Debit and credit cards have the power to catapult crypto payments further into the mainstream and bring them one step closer to practical use. Accordingly, payments professionals and card program owners may want to keep close watch on resulting opportunities to support the crypto ecosystem, especially given the pace of adoption. With a global value of nearly $2 trillion and few signs of slowing down, crypto could be here to stay.