Crypto Debit Cards: How They Work, Why You Need One

Beginner Dec 14, 2021 · 5 min read

Key Takeaways:
— Crypto debit cards are one of the latest innovations to impact the industry
— Until now, crypto has been unable to offer its users the same seamless payments experience as traditional finance
— Lukewarm acceptance of crypto in big industry, as well as limitations in crypto technology, have been the root cause of this
— For the first time crypto cards present a reliable and seamless way for users to pay for regular goods in the same way as traditional finance
— Ledger is launching its own card, the Crypto Life Card, powered by Baanx – and you can sign up now

A man walks into a bar.

He orders a drink and sits down on the leather stool. The bartender reaches into the fridge, selects the frostiest bottle his hand can locate and opens it with an exquisitely appetising “TSSSSSK”. He slides it across the bar.

“Cash or card?” – says the bartender.

“Do you take crypto?”

The limits of your financial freedom.

Sound familiar? Nope, didn’t think so.

Crypto’s core proposition is financial freedom: free from banks and central authorities, free from interference and free to do what you want with your coins and tokens, from staking and swapping to lending and even voting. It grants a whole world of new possibilities that’s expanding by the day. Yet the one thing you can’t always do easily, is, well…spend it.

Crypto payment adoption is patchy

Have you ever tried to pay for your groceries with subway tickets? Try using Bitcoin at your local supermarket and you’ll have a similar experience. Commercial adoption of crypto is still patchy at best, and although there are exceptions, the vast majority of retailers simply don’t have the payment infrastructure to receive this sort of payment.

Scalability is holding blockchain back

And there’s another dimension to this issue too: even if all retailers were amenable to the idea of crypto payments, blockchain’s notorious scalability problem would still prevent it from becoming a global payment system – check out our article on the blockchain trilemma for the inside scoop on that, it’s pretty important. 

Finding a way to scale to rival a global payments system like the Visa network is one of the main tensions driving development in the crypto ecosystem – and although there are constant improvements, no blockchain has yet implemented a real solution to that problem.

Until now, the only reliable and consistent way of spending your coins or tokens in real life was to convert them back into fiat. But the process is cumbersome and inflexible, especially in comparison to the seamless, one-tap experience we’ve come to expect from the debit cards of traditional finance.

And that leads to another important question: if the whole point of crypto is being your own bank, who issues the card?

Crypto cards – making crypto your norm

Enter crypto debit cards.

Simply put, crypto debit cards seek to address the mismatch between the blockchain based crypto ecosystem where your crypto value exists and the fiat-based payment infrastructure that serves our day-to-day needs. But before we get into how crypto cards work, let’s get back to basics. 

Why do we use debit cards anyway?

Having a debit card is something so fundamental, you’d be forgiven for never actually asking why we need one. 

A regular debit card connects your checking account with a global payment network that enables you to transfer funds instantly to more or less any commercial platform. The card’s utility has two main elements:

  1. That it connects the money in your account to an electronic payment network so that it can be moved around easily without you needing to make transfers.
  2. That network is globally accepted, meaning you can rely on your card as a means of paying for goods, anytime and anywhere.

In short, your debit card allows you to keep your saved money securely in your bank account – while giving you the complete and utter freedom of spending it at any moment.

What about crypto cards?

Crypto debit cards have much the same function as regular debit cards, only instead of being linked with your bank account on a centralized platform, their source of funds is your own, personal crypto wallet. By linking your crypto to a global payment network, a crypto card allows you to spend your coins and tokens with the same ease – and certainty – as the money in your bank account.

But didn’t you say it was hard to pay for things in crypto?

It was, yes – but that’s where crypto debit cards really make a difference. As well as linking your funds to a payment infrastructure, crypto cards also manage the conversion of your crypto into fiat at the moment of purchase. When you buy something, the equivalent amount of crypto is taken from your wallet, converted into fiat and sent to the retailer in seconds.

So no more checking if you can pay in crypto, no more cumbersome off-ramping to make purchases and no more uncertainty – for the first time, crypto cards mean your coins and tokens can be relied upon for your day to day life.

Ledger’s Crypto Life Card: Your crypto, your life

If all this sounds familiar to you, and you’ve been waiting for the world to catch up with crypto’s forward thinking, we have great news. Ledger’s ecosystem is expanding to include the Crypto Life Card, in partnership with Baanx. 

With your card, you’ll have more control – and more options – than ever when it comes to using your coins and tokens.

  • Spend your crypto at any moment, seamlessly. Thanks to our partnership with Baanx, you can access a global payments system that allows you to reliably spend your crypto anywhere.
  • Receive your paycheck in crypto and store the value of your earnings until the moment you make a purchase.
  • Withdraw cash from any dispenser using the funds in your wallet – no more clumsy off-ramping.
  • Use your card with an expanding range of coins and tokens, including BTC, ETH, USDT, EURT, USDC, XRP, BXX, BCH and LTC.
  • Manage your CL account from within Ledger Live. Enjoy complete control of all your assets from one platform.

If all this sounds like an option you’d like to have, and you’re ready to make the next step on your journey to complete financial freedom, click here to join the waiting list for the CL Card or refer your friends.

Right, where were we…

A man walks into a bar, sits down and orders a drink.

“I’ll pay by card, thanks.” and pulls out his CL Card.

Blockchain is the great disruptor, offering an array of innovations that give power back to individuals: from bankless personal finance and smart contracts to NFTs and the growing universe of DeFi

Yet the one thing it’s never achieved is the seamlessness of traditional payments – ironically, not because users didn’t want this, but because (in part) we’ve been waiting for big business to get on board with crypto. 

The introduction of crypto cards is a milestone for users because it bypasses those central barriers, and gives you, finally, the power to do exactly what you want with your hard earned value – and wasn’t that the whole point of crypto?

Knowledge is power.

Trust yourself and keep on learning. If you’re interested in what crypto can do for you, check out our School of Block episode all about passive income.

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