Though crypto has witnessed increased interest from financial services companies and various investors, it has one challenge. You can hardly spend these digital coins like regular money. However, the industry promises upcoming services that might help individuals utilize virtual currencies like Bitcoin in various ways when handling day-to-day financial activities.
Here is how you can utilize these banking services to complete your crypto transactions and the associated barriers and benefits.
About Crypto Banking
The cryptocurrency banking term might be a misnomer. That is because exchange firms and companies offering these services are not necessarily banks but direct users on managing their crypto balances. With these types of banks, individuals might hold their money in internet wallets or spend it like traditional money.
Advantages of Crypto Banking
Crypto debit cards can be the main advantage of this baking type. Individuals can use their digital coin’s balance like other currencies to complete their day-to-day transactions rather than holding the assets as investments.
Before the debit cards, users could spend their crypto at retailers accepting the coins as payments or see it for dollars. Now, fintech companies are collaborating with chartered banks or/and card issues for the crypto debits, regulatory outline for automatic crypto sells, converting digital coins into dollars for retail acceptance. That means crypto users can spend their digital funds on platforms using regular debit cards.
Crypto Banking Barriers
One of the main barriers associated with crypto spending and lending is the volatility related to digital coins. It is the same challenge involved with investing in crypto. As Aite-Novarica Group research associate Francisco Alvarez-Evangelista said, anyone interested in crypto investment needs to beware that coin’s fall means losing money.
Most banks depend on currency’s value stability when lending, borrowing, or earning interest of customers’ money. However, it might be challenging to use cryptocurrency securely and stably as traditional currency.
Regulators have also been a challenge in the crypto fintech world. Recently, the SEC was to sue Coinbase for lending product offerings, and the exchange canceled launching the product. To spend your crypto, you might have to open your account with a company offering crypto debit cards.
By Primakov – shutterstock.com