Several cryptocurrency debit cards have been cancelled due to a policy change by a major issuer.
Earlier today, TenX announced that its cards had been deactivated immediately due to its issue, WaveCrest Holdings:
BitPay, which issues a Bitcoin-backed debit card, similarly reported issues, however these would only affect Europe-based customers due to US cards leveraging a different issuer than WaveCrest:
Dash cards have run into trouble in recent months
The last few months have been rough for those hoping for a range of Dash debit card options available in all countries. In late August, Dash card mainstay ShakePay announced it was cancelling all cards issued outside of Europe. The following month, several other providers followed suit, similarly restricting service to exclude all but their European customers. This was also due to cancellations from WaveCrest.
The all-out cancellation by WaveCrest reportedly came from pressure by VISA, according to an email sent by Wirex to its customers:
“Yesterday, our partner WaveCrest Holdings, Ltd., which provides our cards, was instructed by VISA to close all of its prepaid cryptocurrency-related and standard prepaid VISA debit card programs.”
TenX has noted that service interruptions are only temporary as they will be moving to a new card issuer. Similarly, Wirex plans contactless cards in the near future, also leveraging a different provider.
Interfaces with the fiat currency system remain problematic but crucial
In the emerging field of digital currencies, a key roadblock to mass adoption is the “chicken or the egg” syndrome, where currencies seeking wider adoption must face the hurdle that they are not yet, in fact, widely adopted. In order to bridge this gap while gaining momentum, cryptocurrencies such as Dash take advantage of third-party services that allow spending at merchants who do not themselves yet take cryptocurrency payments directly. These key bridges allow Dash users to spend their funds anywhere in the world, increasing the incentive for users to hold Dash, and for merchants to be able to accept it directly with confidence.
However, these bridges are a temporary stepping stone to wide adoption, as they do not fully leverage the competitive advantage provided by Dash as a payment system. Additionally, payment processors and card companies in the traditional financial system may grow to see Dash as threat, and therefore work to limit its reach, as can be seen with the VISA shakeout of cryptocurrency debit cards.