The Ether.Fi crypto-native credit card has achieved a significant milestone, surpassing $10 million in daily transaction volume. This growth reflects a broader trend of cryptocurrency companies expanding into traditional financial services to attract new users.
On June 30, the card’s daily volume exceeded $10 million, with users spending over $200,000 per day. To date, it has processed more than 80,000 transactions and issued over 2,500 cards. Ether.Fi’s CEO, Mike Silagadze, emphasized the goal of creating a comprehensive crypto-native financial ecosystem that allows users to save, invest, and spend without transitioning to traditional finance.
Growing Competition in Crypto Credit Cards
Ether.Fi is not alone in this endeavor. A growing number of crypto-native firms are launching credit and debit cards to appeal to new users, anticipating broader adoption of digital assets. This trend highlights the increasing convergence of traditional finance and cryptocurrency.
Supported by a favorable regulatory environment in the United States, fintech companies and crypto exchanges are rapidly introducing new financial products. Ether.Fi, with over $6 billion in total value locked, ranks as the fifth-largest DeFi protocol globally. It offers various yield-generating products, including liquid staking for Ethereum.
Adopting a Proven Strategy
Credit cards have long been a strategy for non-financial companies to diversify revenue and secure customer loyalty. Major firms like Uber, Apple, and Amazon have successfully launched co-branded credit cards. Similarly, crypto exchanges such as Coinbase and Gemini have introduced credit cards with crypto rewards.
Other platforms, including Bybit and Crypto.com, offer debit cards, while Nexo provides both credit and debit options in the UK and EU. During the 2024 holiday season, Nexo reported over $50 million in transaction volume, though recent figures have not been disclosed.
Understanding the Risks
Despite the excitement, some experts urge caution. Mak Hays, Associate Director for Cryptocurrency and Financial Technology at Americans for Financial Reform, emphasizes the importance of understanding the risks associated with crypto-based credit cards. Key concerns include the security of wallet providers, theft of rewards, and liability in case of loss.
How Ether.Fi’s Card Works
Ether.Fi’s credit card allows users to borrow Circle’s USDC stablecoin against their crypto assets. This setup enables borrowers to access liquidity while earning yield on their holdings. Users can borrow at 0% interest and earn cashback rewards. To date, nearly $2.8 million has been borrowed, with over $1.6 million in outstanding loans.
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Frequently Asked Questions
What is a crypto credit card?
A crypto credit card allows users to spend borrowed funds or convert crypto holdings into fiat currency for everyday purchases. These cards often offer rewards in cryptocurrency, providing an easy entry point for digital asset usage.
How does Ether.Fi’s card differ from traditional credit cards?
Ether.Fi’s card is crypto-native, meaning users can borrow against their digital assets without selling them. This enables continuous yield earning while spending, a feature not typically available with traditional credit cards.
Are crypto credit cards safe?
While convenient, crypto credit cards come with risks such as volatility, regulatory uncertainty, and potential security issues. Users should research providers, understand terms, and ensure secure storage of rewards.
Which companies offer crypto credit cards?
Major players include Coinbase, Gemini, Crypto.com, and Nexo. Each offers unique features, such as rewards in Bitcoin or stablecoin borrowing options.
Can I use a crypto credit card for daily purchases?
Yes, most crypto credit cards function like traditional credit cards and are accepted wherever the card network (e.g., Visa) is supported. However, spending limits and terms vary by provider.
What are the benefits of using a crypto credit card?
Benefits include earning crypto rewards, accessing liquidity without selling assets, and potential cashback offers. These cards also help users maintain exposure to crypto market gains while spending.
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