Hong Kong-based crypto startup Crypto.com plans to issue 100,000 cryptocurrency debit cards over the next two months, according to a September 5 article in the South China Morning Post.
Though hardly new in the US and elsewhere, the debit cards would represent something of a novelty in Asia. Crypto.com will begin distributing the cards in Singapore, and has plans to reach a global market. The new debit cards are being issued in collaboration with Germany's Wirecard Bank.
Crypto.com's new debit card will apparently be linked to cryptocurrency wallets and fiat accounts, allowing customers to spend their digital currency after converting it to fiat. To date, the platform supports Binance Coin, Bitcoin, Ether, Litecoin, and Crypto.com's own coin, the MCO. These digital currencies can be converted into seven different fiat currencies, including the Hong Kong dollar, the Singapore dollar, and the US dollar. Neither the article nor the Crypto.com website states how or when the exchange rate is set for currency placed on the debit card.
The article goes on to say that Crypto.com also has ambitions to break into the lending industry by applying for a money lending license in Hong Kong and Singapore. If all goes according to plan, users of Crypto.com's debit card and wallet service will be eligible to take out loans backed by Bitcoin or the MCO.
Crypto.com co-founder and CEO Kris Marszalek claims that pairing the debit card with a lending service will ultimately disrupt the credit card industry and help put a stop to predatory lending.
Marszalek feels Crypto.com is safe from the risk of borrowers being unable to pay back their loans because Crypto.com will only lend 40 to 60 percent of the value of crypto that must be given to the company as collateral. Marszalek says Crypto.com could therefore only suffer losses from volatility in the value of the cryptocurrencies pledged as collateral.
Crypto.com reportedly raised 26.7 million USD during its token sale in May and June of 2017 and will earn revenue from transaction processing fees and from its automated crypto buying and selling service, which is still in the testing phase.
Crypto.com is not the first digital currency company to issue a crypto debit card or get into the lending industry. As early as October 2016, ETHNews reported that financial services company UQID was offering a prepaid debit card specifically to allow cryptocurrency to be spent at brick and mortar businesses. In May of last year it was reported that digital currency company Token Card had developed a debit card to let anyone spend their ERC20 tokens at Visa terminals. Just two days ago, ETHNews reported financial services company MakerDAO was using its stablecoin to issue Ether-backed loans.
Correction (September 6, 2018): Crypto.com contacted ETHNews to clarify some parts of the South China Morning Post article, upon which our reporting was based. Our article originally said that Crypto.com had applied for a license to issue the cards in Hong Kong. Crypto.com said because it "does not issue cards, it also did not apply to issue cards in Hong Kong." Additionally, we originally reported that Crypto.com had secured a "stored-value facility license" in Singapore. Crypto.com clarified that it does not need such a license as its partner, Germany's Wirecard Bank, "already has the appropriate licenses."