2nd Generation: Wallet-Linked Debit Cards

The second generation of crypto cards introduces more advanced functionalities by directly linking debit cards to users’ crypto wallets. This approach provides greater flexibility and real-time access to digital assets. Here’s how these cards operate:

• Direct Wallet Connection: The card links directly to the user’s crypto wallet, allowing the user to select which assets to spend.

• Real-Time Conversion: When a transaction is initiated, the system checks and debits the crypto balance in real-time, converting it to fiat at the moment of purchase.

• Authorization and Spending: Transactions are authorized once the conversion is complete, making these cards more dynamic and versatile.

These cards, often offered by regulated fintech companies like Wirex and Revolut, reduce the need for pre-funding and provide more control over spending. However, they still involve some level of custodial risk, as the funds are held by the card issuer until the point of transaction.