What are crypto credit and debit cards?

The use of crypto credit and debit cards continues to grow, with Visa (V) customers making $2.5 billion in payments in crypto-linked cards in the first fiscal quarter of 2022. Both crypto credit cards and debit cards allow holders to pay for goods and services by converting cryptocurrency into fiat currency at the point of payment.

What is a crypto bank & how does it work?

Traditional banks lend out their customers’ deposits and pay clients a slice of the earnings as interest. Crypto outfits take a similar approach: They pool deposits to offer loans and give interest to depositors.

Do crypto banks have a reserve requirement?

Crypto outfits take a similar approach: They pool deposits to offer loans and give interest to depositors. But by law, banks are required to have reserves to ensure that even if some loans go bad, customers can still withdraw funds, whereas cryptobanks do not have the same reserve requirements and the institutions they lend to can take risky bets.

Could a central bank issue a government-issued cryptocurrency?

Central bankers are examining the potential for issuance of a government-issued cryptocurrency. That would theoretically offer the convenience of crypto with the reliability of money controlled by a central bank. Many countries, including the United States, are considering developing a central bank digital currency.