Last updated on May 27th, 2021
Cryptocurrency news is everywhere these days. No matter where you turn, you cannot help but hear about Dogecoin, Ethereum, or Bitcoin. The latter is the most well-known of the cryptocurrencies – and the most valuable. As more and more fintech and credit card issuers turn towards unique rewards, what role will Bitcoin play in the future of credit card rewards?
What is a Crypto Credit Card?
Crypto credit cards, or credit card cards that offer cryptocurrency or Bitcoin rewards, are at the cutting edge of fintech credit cards. These cards operate the same as a traditional credit card – but with a unique rewards structure.
Crypto credit cards specialize in offering digital currency as a cash back reward. This rewards structure differs from other cash back credit cards, which give what is known as fiat money. Fiat money is a sophisticated way of saying “government-regulated currency,” and as such applies to rewards in U.S. or Canadian dollars, Euros, British Pounds, or however the card issuer distributes cash back rewards.
The premise behind crypto and Bitcoin credit cards is that they provide an easy way to earn additional crypto assets anywhere either Visa or Mastercard is accepted. In this regard, crypto credit cards and crypto debit cards differ significantly. A crypto debit card allows the user to spend their digital assets wherever the payment network is accepted, whereas the credit card option earns these digital assets.
Some of the more popular crypto debit cards include the Coinbase Visa Debit Card and the Crypto.com Visa Debit Card. There are also several debit and credit cards for crypto enthusiasts outside of the United States.
Which Bitcoin Credit Cards Are Currently Available?
There are currently two upcoming crypto credit cards: the Gemini Mastercard and the BlockFi Bitcoin Rewards Card. The BlockFi Card was the first Bitcoin credit card to be announced, and will provide the following benefits:
- 5% Bitcoin rewards on all purchases.
- $250 in Bitcoin after making $3,000 in purchases with the card within the first three months of opening an account.
- $30 in Bitcoin for every client referral.
- 5% Bitcoin rewards on all purchases from month four through six of card membership. This perk applies to up to $100 in Bitcoin.
- An additional 2% APY on the cardholder’s average daily Stablecoin balance, up to $200.
- 25% Bitcoin rewards on eligible BlockFi trades, up to a maximum of $500 in Bitcoin per month.
The Gemini Rewards Card will earn up to 3% back in rewards and feature the Visa payment network. The card recently hyped a new collaboration with digital artist, Beeple, to create a limited edition Beeple x Gemini Credit Card.
Both of these cards are currently in development, with potential applicants able to join a waitlist for each.
Are Bitcoin and Cryptocurrency Rewards the Future of Credit Cards?
The lack of current crypto credit card offers is telling. Sure, the crypto rewards space is new, but the difficulty in devising and developing rewards structures that work in real-time might be the biggest downfall for Bitcoin rewards credit cards.
So, is Bitcoin, or another cryptocurrency, the future of cash back rewards? While nothing is certain, the simple answer is probably not. The biggest thing holding crypto rewards back is their acceptance as an everyday payment method.
Most credit cardholders want cash back rewards they can use. Crypto simply doesn’t provide that versatility – yet. Sure, the value of crypto can rise significantly, but if you can’t apply those savings towards your bank account, for travel rewards, etc., what’s the point?
That said, there is plenty of room in the credit card marketplace for an alternative rewards system. And if the likes of Gemini and BlockFi can refine – and perfect – the crypto and Bitcoin rewards with their offerings, the future might just be digital after all.
Related Article: Mastercard Set to Offer Cryptocurrency Payments