A Hong Kong based blockchain startup is preparing to roll out the region’s first cryptocurrency Visa debit card. It has applied for licenses and plans to issue 100,000 cards starting in Singapore over the next two months.
Crypto.com, previously known as Monaco before a name change in July, also plans to apply for money lending licenses in Singapore and Hong Kong before expanding its crypto debit card services to include crypto backed money lending. Company co-founder and CEO, Kris Marszalek, said;
“To holders of cryptocurrencies, having the peace of mind that you can readily convert back into fiat currencies and cash out is very important. Not all exchanges support crypto-to-fiat transactions, and even if you hold your digital assets at the exchanges’ wallet, the withdrawal process is also complicated. We believe our product addresses a real need, and enhances trust in digital assets,”
According to the SCMP holders of the firm’s crypto debit cards and users of its crypto wallet services can also take out loans backed with Bitcoin and its own native MCO token. A stored-value facility license has already been granted by the Monetary Authority of Singapore (MAS) and the cards are issued in partnership with Wirecard Bank from Germany.
The firm has ambitions of disrupting the credit card industry claiming that banks have been unethical in issuing unsecured revolving credit to consumers who can barely afford their interest rates. Marszalek added;
“The credit card business model is one that is bordering on unethical business, as banks make a big chunk of profit from people who cannot afford late fees. These people should not be given a credit card in the first place,”
To reduce this risk, customers will only be able to borrow fiat currency up to 40-60 percent of the value of cryptocurrencies they must pledge to the company as collateral. Credit history will not be check for the crypto debit card application but KYC procedures will be carried out. The volatility risks with Bitcoin and altcoins will be taken by Crypto.com itself.
The debit card will be linked to fiat and crypto wallets supporting BTC, ETH, LTC, MCO and BNB in addition to seven fiat currencies including US, Singapore and Hong Kong dollars.
$26.7 million was raised in the firm’s ICO last year, and its tokens are currently trading on 21 exchanges according to the report. MCO is currently trading at $4.65, down 7% on the day with the rest of the markets during today’s big selloff.