Conceptualized in 2014, the first Bitcoin debit card was an ambitious project announced by two Hong Kong based startups – Xapo and ANX – around the same time. The cards allowed for Bitcoin to be used in point-of-sale transactions and ATM withdrawals.
However, the two ideas died an early death as a result of high fees – US $3 fee for an ATM withdrawal, US $1.5 for a POS payment and a card load commission of 2.5%.
Card Idea Revived
Now a London-based startup, calling itself the London Block Exchange (LBX), is planning to launch a similar prepaid card that will allow users to spend cryptocurrencies across the UK.
Dragoncard, which incorporates the usual services that can be expected of a Visa Debit Card, will allow also allow consumers to perform payments using Bitcoin, Ethereum, Ripple, Monero and Litecoin.
The card will be linked to an exchange that allows cryptocurrency to be backed out into Pound Sterling and vice versa.
A fee of 0.5% is levied on each transaction. Whilst the fees are higher in comparison to a regular debit card, they are considerably lower when matched to other crypto/fiat interface services.
Confidence in digital currencies
London Block Exchange believes that the time is right for a Bitcoin debit card as interest is Cryptos have soared in 2017 – surpassing a combined market cap of $US 100 billion for the first time in June 2017 and doubling to $200 billion less than a few months later in November of the same year .
The startup has already raised GBP £2 milllion from a consortium of private investors.
Similar Ventures in the Pipeline
UK-based startup Wirex has also entered into a joint venture with Japan’s major financial group SBI to create its own cryptocurrency payment card. And in what is now proving to be a highly competitive arena, Singapore-based TenX which is receiving backing from PayPal and Swiss outfit MonaCo, is also seeking to develop a similar cards which will offer its own range of banking services.
Uncertainty an Obstacle to Mass Adoption
Whilst cryptocurrencies have some way to go before they enter the public mind as legitimate payment mechanisms – not to mention the legal aspects which are as yet to be ironed out within any national jurisdiction – the increasing number of services that integrate traditional fiat banking services with a cryptocurrency interface might seem to indicate an emerging trend towards mass adoption. Â
Cryptocurrencies, however, are highly volatile and it is their inherently unpredictable nature which continues to represent an obstacle to general adoption, particularly within the retail sector.
Some crypto-based start-ups such as UTRUST are attempting to address this uncertainty by introducing hedging mechanisms to eliminate the short-term uncertainties presented by crypto price swings. It remains to be seen if retailers themselves can be convinced.Â
