One of the problems of Bitcoin, beyond the fact that exchanges can melt into slag at warp speed, is that it’s actually kind of hard to spend it compared to actual money. This is mostly due to the fact that it’s pretty hard to turn it into actual money. But, of course, a Bitcoin debit card that sounds almost absurdly shady will be perfect and not end in tears!
Yep, it’s happening. Or at least Xapo, a Bitcoin storage bank, is claiming that it is. And actually, it’s not a terrible idea in some respects:
Xapo Debit functions like a traditional debit card and is a big step forward in the development of the bitcoin infrastructure – for the first time, customers have the ability to use bitcoin at any online or offline merchant that accepts debit or credit cards. This makes it easy for users to pay with bitcoins in real-time and makes it seamless for merchants to accept payment. After a customer makes a payment using bitcoin, the merchant will receive the funds in their local currency.
This works about how you’d expect: You have a set number of Bitcoin in your digital wallet. You swipe the card, and the bank backing the card sells off the amount of Bitcoin necessary to cover your purchase. One teeny, tiny problem: It turns out Xapo, despite claiming to have cut a deal with MasterCard, turns out to have no relationship with the company.
Also notably missing from this Utopian ideal is what fees you’re going to pay, because there’s no way in hell Xapo and whichever bank it winds up working with isn’t going to make users pay for the convenience. Similarly, considering the tendency of Bitcoin to whipsaw wildly in value, there’s a very real chance that you might not be able to cover some purchases.
All that said, though, this isn’t the worst idea. In particular, anybody who’s been overseas and struggled with currency conversion can see the value in buying some Bitcoins and just using this as a sort of prepaid debit card. Still, Xapo is going to have to cough up some more details before this makes any sense.