Crypto.com, a Hong Kong-based blockchain startup previously known as Monaco, is reportedly planning to issue cryptocurrency Visa debit cards under a license from a German bank. According to the South China Morning Post, Crypto.com intends to ship over 100,000 crypto payment cards to its customers in Singapore, Hong Kong, and in several other countries throughout the world.
Bridging The Gap Between Fiat And Crypto
The crypto debit card provider will be working with a German financial institution, which has a “stored-value facility” license from Singapore’s financial regulator and central bank, the Monetary Authority of Singapore (MAS). Commenting on the rollout of the crypto-based payment cards, Crypto.com co-founder and CEO, Kris Marszalek, said:
“To holders of cryptocurrencies, having the peace of mind that you can readily convert back into fiat currencies and cash out is very important.”
Users will also have access to a multi-currency wallet that will allow deposits and withdrawals for Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Binance Coin (BNB), and the Monaco token (MCO). Additionally, the wallet will support transfers for the following fiat currencies: USD, Singapore dollars (SGD), Hong Kong dollars (HKD).
Crypto.com’s crypto payment card solution has been developed through a partnership with Wirecard Bank, a German financial services provider. Marszalek explained that the crypto cards will be introduced to an “untapped market” and that they will help bridge the gap between traditional finance, or fiat currencies, and cryptos.
The tech entrepreneur also said that the cryptocurrency market needs better liquidity services by noting that:
“Not all exchanges support crypto-to-fiat transactions, and even if you hold your digital assets at the exchanges’ wallet, the withdrawal process is also complicated. We believe our product addresses a real need, and enhances trust in digital assets.”
Crypto-Backed Money Lending
Marszalek added that his company’s crypto debit cards will be secure, easy-to-use, and affordable. Notably, Crypto.com is also planning to apply for licenses in the appropriate markets. The blockchain startup intends to expand its services by offering cryptocurrency-backed money lending services, as this is another untapped market.
If approved, Crypto.com will be able to provide collateralized bitcoin (btc) and MCO (its native token) based loans to its crypto payment card holders. Marszalek criticized the current lending system by referring to it is as “unethical business.” He said that his company’s crypto-based lending solution will “disrupt” the traditional credit card industry, which takes advantage of consumers’ inability to pay back loans as it issues “unsecured revolving credit” at very high interest rates.
In order to reduce credit risk for consumers, Crypto.com aims to allow its customers to borrow only up to 60% (in fiat money) of their cryptocurrency held as collateral. Given the volatile nature of the digital currency market, the blockchain startup appears to be willing to absorb potential losses, presumably in an effort to become a leading provider (or pioneer) of crypto-based lending services.