Why Crypto Credit Cards Won’t Work…Yet

Bitcoin is not a get rich quick scheme. Yet you wouldn’t know it from looking at its returns. The digital coin is up more than 580%, year-to-date. Had you bought into the token you could have potentially turned $10,000 into $68,100.

Bitcoin Price - 02-11-17

Source: Coin Desk

Visa Approves Crypto Card

Bitcoin was originally created as a peer-to-peer payment system, allowing transactions without the need for financial middle men. And Visa is trying to get back to grass roots. They’ve approved a prepaid card backed by the cryptocurrency, Monaco.

As reported by Bloomberg:

Monaco’s prepaid card has been approved for issuance to Singaporean residents, Visa spokeswoman Lea Cademenos said in an email. Visa approved the program through Monaco’s issuer, Wirecard AG.

‘“The demand for the Monaco Visa prepaid cards has exceeded our expectations with over 17,000 cards reserved, based on word of mouth alone,” Kris Marszalek, Monaco’s chief executive officer, said in a statement on Tuesday. “This is an important step towards Monaco’s vision to introduce cryptocurrency to the mass market.”

Cryptocurrencies are clamouring for deals with Visa because it would mean they could be converted into fiat money and accepted at the 44 million merchant locations in the payments network. Monaco gained as much as 695 percent in value beginning on May 17, when the firm tweeted it would offer a Visa-branded payment card. Monaco didn’t have a deal with Visa at the time.

Monaco has said Singapore is only a starting point for its prepaid card program. The firm recently hired Brent Diehl, a former Visa executive, to lead its international expansion into Europe, North America and the rest of Asia.

Visa has also approved programs for Bitpay and Shift Card that allow consumers to convert cryptocurrencies into legal tender and deposit those funds into a bank account that is linked to a Visa debit or prepaid card, Cademenos said.

It’s a great idea. It’s originally what a majority cryptocurrencies were created for. However, if bitcoin and other cryptos continue to rise, I doubt the sustainability of demand for Visa backed prepaid cards.

Why will there be no demand?

Well, if cryptocurrencies keep rising, why would you want to part with them just yet? There are thousands of stories of people spending their bitcoins on foods and items, years ago. Of course they all wish they had held on, growth their small holdings into a mammoth sum.

Like I said, it’s a great idea. But as long as digital coins continue to appreciate it won’t be a huge success…yet.

Cheers,

Härje Ronngard,

Junior Analyst, Money Morning

PS: Want to learn how to buy and sell bitcoin? Click here.


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