A Hong Kong-based startup is producing Bitcoin debit cards that can be used from regular ATMs to withdraw real cash. The Cryptex card is touted by its makers to work with over 90% of ATMs in the U.S. and 50,000 ATMs in Japan. On its website, over 80 other countries are listed as having traditional ATMs compatible with the card. It announced yesterday that it will begin shipping cards within the next 4-6 weeks.
The cardholder sends bitcoins to an address affiliated with the card. Cryptex converts the bitcoins to fiat, which is then available for withdrawal via a conventional ATM.
In not only dishing out cash, but doing so from a regular banking machine, the card takes “Bitcoin banking” to a new level. Bitcoin ATMs that convert both ways can do the same, but there are still not that many around, especially in smaller cities.
The card ships for free. The company makes money on the conversion rate, which they advertise as competitive. There is no mention of the likelihood of fees levied by the bank or network affiliated with the ATM in question.
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While they are effectively behaving like an online exchange, the service may fulfill a couple of niches. One of the card’s benefits is that cash is obtained instantly, as opposed to an exchange where one can wait several days or even weeks for a withdrawal. And with some exchanges, there’s always the lingering doubt about its solvency and if the withdrawal will even arrive.
In addition, just as the card serves smaller markets still without Bitcoin ATMs, so also it will come in useful in markets where people don’t have access to banking services or can’t afford bank accounts.
So how can a standard ATM support such cards from a previously unknown brand? The card is apparently tied to China’s UnionPay, which works anywhere Discover is accepted.
We’ve previously discussed in helping the Chinese skirt tight currency controls, and how this may contribute to lessening the allure of Bitcoin for doing such in and around China. Perhaps now, UnionPay’s facilitation will reverse such a trend.