In a recent survey, 23% of people said they have purchased something at least once from a store that only accepts Bitcoin or other cryptocurrency. How will crypto disrupt credit cards and cash out their rewards?

As crypto moves into the mainstream, many people are still wondering how its adoption will take place. The question of whether or not crypto will replace credit cards is complex and multifaceted. Though it may be difficult to predict what this future holds for card users, there are some trends that can already be seen today in first-movers like Mastercard and Visa.

Cryptocurrencies have been a hot topic in the last few years. As cryptocurrencies become more popular, they will also be used as a form of payment for goods and services. In order to use cryptocurrencies, you need a cryptocurrency wallet. The best cryptocurrency rewards card is one that has no annual fee or foreign transaction fees.

How-Will-Crypto-Disrupt-Credit-Cards-And-Rewards

 

What Impact Will Crypto Have on Credit Cards and Rewards?

on November 20, 2021 by Gary Leff

A currency has two functions: it acts as a medium of trade and as a store of value. So far, crypto has failed to meet either of these criteria; it’s difficult to use (you must first convert it to another currency, which is expensive), and solid stores of value don’t vary dramatically in price.

However, crypto is no longer a fad; many brilliant people are working on establishing companies, tools, and use cases, and prices for the most popular currencies have dipped — then rebounded. Cryptocurrency’s price does not seem to be behaving like a typical bubble.

It’s important to distinguish blockchain from cryptocurrency, which is a specific use of blockchain technology. Blockchain encourages trust and verification, which is really beneficial (e.g. self-executing contracts). Consider the last time you hired a vehicle. You strolled into the parking lot, they handed you the keys, and you drove away with something worth $30,000 or more, and they just trust you to return it.

Trust is essential to economic activity, and blockchain will be important not just in low-confidence cultures, but also in allowing unknown actors to operate with trust, expanding markets and making them more competitive. That’s fantastic.

Credit card firms and payment networks are dabbling with cryptocurrency, but financial services are severely regulated, and Treasury Secretary Janet Yellen despises the digital currency. As a result, crypto will not be widely adopted in conventional finance. Crypto may be able to beat standard interchange prices, but it won’t be as inexpensive as it seems today if regulatory compliance, such as Know Your Customer regulations imposed by the government, is included in.

Crypto competes with established payment networks, and the availability of low-cost alternatives will certainly drive prices down. Lower exchange rates imply lower long-term returns. That’s because it won’t make sense to invest as much to encourage network transactions.

However, crypto will not be able to replace credit cards since credit cards combine a number of services that are beneficial to users.

  • clearing payments
  • obtaining funding (APR)
  • Protections ranging from transaction security to ensuring that you’re only charged for what you purchase and that merchants are paid – as well as add-on services such as price protection, extended warranty, and so on.

 

These may be disaggregated with crypto and other financial advances, but it isn’t the same as replacing them. To put it another way, new technologies will matter, but they will not consume this highly controlled world.

More From the Wing’s Perspective

The “blockfi bitcoin credit card” is a new company that offers a crypto-backed credit card. The company plans to disrupt the current credit card system by offering a credit card with no interest, and lower fees.

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