Today many see Bitcoin as an asset to invest in. They buy it primarily to trade or HODL. Meanwhile, many businesses in its ecosystem have been set up around the idea that it is an investment asset. Indeed, even regulators around the world have classified it as a commodity or property, and therefore trading it attracts capital gain taxes.
However, there is little doubt that Satoshi Nakamoto, even if still anonymous, created Bitcoin to be used as an e-cash. That means it was supposed to be, in addition to a store of value, a unit of account, and a medium of exchange. It is money, basically.
Over time, Bitcoin is gaining the capacity to serve as a currency you can use to settle payments as you travel around the globe. In particular, you can use it directly to pay for goods and services. For example, you can buy air tickets and pay for accommodation using Bitcoin through CheapAir.
Meanwhile, you can shop for your electronics from Newegg and pay with Bitcoin. Other global brands that accept Bitcoin directly or through third-party payment processors include Microsoft, Overstock, Rakuten, and Starbucks.
With that stated, we are still very far from one being able to leave their house and travel around the world with only a Bitcoin wallet as the source of the funds you use to pay for goods and services. However, with an additional layer of payment processing, that is doable.
A crypto debit card is the most effective and handy layer of payment that you can add or acquire to have your crypto wallet as the only source of the funds you use to pay for goods and services as you travel.
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What to consider before acquiring a crypto debit card.
Before I explain how a crypto debit card works, it is important to acknowledge that as much as it enables you to spend crypto as the only payment method for your travel, it can be considered an additional layer of complexity and friction.
Indeed, you might consider having a regular debit or credit card, which can take care of most of your payment needs while you travel. This is an option that you are most likely more exposed to.
However, the crypto debit card does provide unique advantages that are likely to balance that out or even outweigh the fact it is an additional layer of complexity in your financial management.
Before we look at the advantages of a crypto debit card, let us look at how it works.
Let’s begin with the easy and more basic part: the crypto debit card is similar to that issued by a commercial bank or a regular credit union. Indeed it is even supported by the same payment rails, particularly Visa and Mastercard.
That means you can just present the crypto debit card at any store that accepts Visa and Mastercard, and the process will not divert for even a bit. The merchant never even gets to know that you are shopping using crypto.
The uniqueness of a crypto debit card starts with the issuing entity or provider. The card is not issued by a traditional commercial bank or credit union but primarily by a crypto exchange, crypto bank, crypto wallet provider, concierge service provider, or other similar service providers.
Now the main difference between a crypto debit card and other debit cards is the source of the funds. For most of the other debit cards, the funds come only from a bank account. The funds come through a bank account with crypto debit cards, but the source is a crypto wallet.
The crypto wallet is linked to the bank account that serves your card through an exchange. The crypto-to-fiat exchange occurs through a manual or automatic request. The funds converted from crypto to fiat are sent to the bank account from which payments are made to the merchant whenever you shop or pay using the card.
Advantages of using a crypto debit card
Spending your money through a crypto wallet is a convenient way of protecting it from the possible erosion of its value through inflation. You keep your funds primarily as a deflationary currency until you need to use them.
Over time, most currencies lose value due to increased supply by issuing more units into circulation. Indeed, this is the main reason the prices of goods and services grow over time. You lose your purchasing power when you keep your funds in a currency inflated over time.
That is not the case with Bitcoin, though. Bitcoin is primarily a deflationary currency. While its market price swings up and down, in the long term, the purchasing power of the digital currency is expected to grow. That is because its supply is limited to 21 million units. No authority or person, not even Satoshi Nakamoto, can remove the cap on the number of bitcoins that will ever be in circulation.
Another advantage of using crypto debit cards is the high limits that some of the providers offer. Indeed, many crypto debit cards allow you to pay more and withdraw more at the ATM than traditional debit cards allow you.
This comes in handy if you are a luxury traveler who often finds yourself spending more than the average traveler.
The card often comes as part of a package with multiple other services. Indeed, some crypto debit cards come as part of an exchange’s service. Others come as part of a crypto wallet platform. Indeed, some form part of concierge services, especially for luxury travelers.
By using a crypto debit card, you will likely get more than the ability to make payments. Some crypto debit card providers are turning the physical card into a fashion statement tool. That is achieved by focusing on the actual designs and using superior materials such as precious metals.
Indeed, with these benefits, it is easier for a traveler to find a crypto debit card than a good-to-have means of payment. It can be an addition that makes your travel more convenient and fun.
