Despite cryptocurrency’s name and its soar in value over the past year, it is still hotly debated whether it truly counts as ‘real money’. The most famous cryptocurrencies – Bitcoin, Ethereum, Litecoin – have caused a buzz in the financial world, with leading financial figures often clashing publicly as to what they should be classed as and as to their future.
Cryptocurrencies all share the same feature of being traded on the blockchain as a way of measuring value. But some of these, such as Bitcoin, have long sought to be used as a new form of currency outside of the traditional banking structure.
The irony is that despite cryptocurrency being a type of “currency”, it’s very difficult to actually spend in the traditional sense, especially when contrasted with the explosion of payment possibilities surrounding fiat money in recent years. For example, it’s likely to be difficult to pay for your groceries with Bitcoin, despite its position as the most popular cryptocurrency. One big stumbling block is the fact that users suffer financially on blockchain transactions, especially if they execute small micro-transactions. This is due to substantial fees which can be as high as $15. To put this into perspective, in order to buy a standard cup of coffee, you’d be paying up to five times more to cover the transaction cost, meaning it simply isn’t practical to make small purchases.
However, In the UK thanks in part to the implementation of Open Banking which has bolstered emerging fintech companies, payment methods have been developed to allow the easy spending cryptocurrency to become a practical reality. Modern trends show that consumers are favouring products that cut down your numerous cards and accounts into one nifty tool or app. For example, payment card company Curve aggregates your various bank accounts into one card and allows you to access all your details through the app. Why this only works with regular credit and debit cards currently, the increased popularity an availability of this technology is a significant boon to crypto innovators.
One example of this is the FuzeX Card, which has recently launched in the UK through its partnership with Energi Mine. Like a standard debit or credit card, it has an EMV chip which is required to complete card transactions at merchants and retailers. However, unlike a standard payment card, you can also spend cryptocurrency at your everyday merchant and retailer with minimal transaction costs. Kitted with an e-paper display, users can also check their crypto balance on the card itself before spending.
These kinds of all-in-one payment cards are bridging the long existing rift between traditional currency and the less mainstream cryptocurrencies. While the most popular cryptocurrencies like bitcoin have been associated with some accessible fiat exchange mechanisms (bitcoin ATMs to name one), the multitudes of altcoins have remained ring-fenced twice over, by being virtue of being cryptocurrencies, and by the fact they must be changed into more popular coins prior to being exchanged for fiat currency. The FuzeX card stands out by supporting altcoins like Energi Mine’s EnergiToken by granting them real world utility beyond what they individually offer.
This development is a huge leap in the journey for crypto to be recognised as a fully-fledged currency and take further steps into the mainstream. With greater accessibility to cryptocurrency, we will see greater uptake of cryptocurrency with the wider public, which also has the indirect effect of significantly raising the profile of blockchain applications. It is exactly the kind of move that the crypto-community have been waiting for.
Omar Rahim, CEO of Energi Mine