Since the development of the first crypto, which led to the emergence of altcoins, the field of cryptocurrency has instantly caught the attention and interest of crypto enthusiasts and other financial services firms. Despite its constant development and beneficial services to its users, it comes with one challenge – it’s harder to spend crypto compared to traditional money.
Along with the existence of Bitcoin and other cryptocurrencies comes the advancement of technology and how the world started adopting crypto as a payment option. Millions of businesses around the world have accepted crypto as a mode of payment to purchase their services and goods. However, one problem still exists: cryptocurrency is not physical money that you can store in your pocket, and utilising it to purchase something is way too complicated.
This led to the question that many people who are not familiar with crypto have. After reading this, you probably also wonder: how do you spend cryptocurrency? Fortunately, there exists a system to answer this and help crypto traders like you with this issue. Two words: cryptocurrency banking.
As the world of crypto progresses, new services were developed to help crypto investors to utilise Bitcoin and other digital coins in a unique way and incorporate them into everyday finances. If you would like to learn more about this system, we came up with a simple explanation about crypto banking that might interest you and answer all your questions.
Cryptocurrency Banking: Definition
Cryptocurrency banking is one of the highly-efficient methods that help crypto traders utilise the digital funds earned from trading on crypto platforms like Coinbase or Bitcoin Up, for example. Over the years, experts have claimed that the term crypto banking may be incorrect because the trading companies that manage these services do not technically fall into the category of banks. This term only refers to the different ways that investors handle or store their crypto profits.
Cryptocurrency banking paves the way for traders and investors to take charge of their virtual funds and store them in crypto wallets or utilise them just like regular money.
Cryptocurrency Banking Benefits
One major important benefit of cryptocurrency banking is the ability to own a crypto debit card. These cards assist traders in using their digital funds like traditional currency to complete a transaction from an establishment that accepts crypto as a payment option. These cards also allow traders to withdraw their crypto in direct cash instead of holding it as an investment.
There’s no denying that these cards indeed come in handy; before their existence, the only way to utilise cryptos was by looking for businesses that accept cryptos as a replacement for traditional currency like euros or dollars.
Thankfully, as years go by, commercial technology companies partnered with debit card issuers and chartered banks to come up with this type of card. The success of the partnership led to the automatic selling of cryptos between established banks and their partners’ regulatory framework, which allowed retailers to also adopt this system. This process allows the acceptance of digital funds wherever there are regular debit cards.
Cryptocurrency Banking Disadvantages
Similar to the cryptocurrency market, the main disadvantage or risk of crypto banking is its volatile nature. Before investing in crypto, traders must be aware and know how to handle the effects of the market’s constantly changing values.
Different banks rely on the constant value of crypto to loan or earn interest on money, but it can’t be denied that crypto is not as stable or as safe compared to traditional currency. Due to this behaviour, it’s recommended to be aware before using your digital coins and accept the risk that its value could go up because its worth is based on the real-world value of your coin.
Cryptocurrency Banking Process
If you’re interested in crypto banking, the first thing that you must do is purchase cryptos such as Ethereum, Bitcoin, Litecoin, or other digital coins that you would like to invest in. Nowadays, several companies have incorporated buying and selling cryptos in small amounts and storing them in crypto wallets, including Coinbase, Cash App, and Paypal.
One of the easiest ways to spend your digital funds is by opening an account with a business that offers crypto debit cards and digital currencies. One firm that does this is Coinbase; this company offers a special debit card that allows investors to utilise any digital assets they own and, in exchange, earn crypto rewards.
Given its continuous development and excellent history that gained millions of followers worldwide, cryptocurrency has a great potential to be an ideal source of peer-to-peer loans in the coming years. Cryptocurrency banking serves as an efficient way for crypto enthusiasts in the market to utilise their digital funds earned from crypto trading.
