It was launched Cryptex Card – the world’s first prepaid Bitcoin ATM card

The card, which was announced yesterday at the Inside Bitcoins conference in New York City, aims to make it easier and faster for Bitcoiners to convert their cryptocoins into local currency and, more importantly, spend it.

With a Cryptex Card in hand, Bitcoiners will be able to “turn cryptocurrency into cash at hundreds of thousands of ATMs and millions of merchants’ point-of-sales (POS) worldwide, regardless of whether the merchants or banks accept cryptocurrency,” the Hong Kong-based startup said in a release.

The new debit card-based digital currency service aims to get around one of the biggest problems faced by holders of bitcoin: the very limited number of outlets for spending or converting their digital currency.
Hong Kong-based startup Cryptex Card provides an online service for quickly converting bitcoins into dollars and loading them on a card that can then be used at ATMs and merchant-based point-of-sale card readers.

The card, which will function like a prepaid debit card, will be issued under a license tied to Chinese card provider Union Pay, which is accepted in outlets all around the world including the Discover card network in the U.S.

The project is the latest attempt to resolve bitcoin’s so-called “gateway” problem. Converting bitcoins into traditional currencies for simple purchases has been a major headache for users of the cryptocurrency.

According to coindesk.com, The Cryptex Card is an unusual hybrid that allows users to take out cash on standard bank ATMs, but with the source of the funds being, indirectly, your bitcoin wallet. The user does not actually make direct bitcoin-to-fiat exchange transactions via the card, however.

First the card user must send bitcoins to a linked Cryptex Card bitcoin deposit address. Next, a specified amount of these bitcoins are converted into fiat currency, which can then be withdrawn from regular ATMs (see the company’s promo video below).

https://www.youtube.com/watch?v=0VAw2sCgzFQ&feature=player_embedded&width=500&height=150

“In order to issue your card, we need you to upload your ID & Proof of Address. Once your docs are approved, we will notify and allow you to deposit Bitcoin onto your card before shipping. When the Cryptex Card arrives, you can begin withdrawing your cash immediately…Your card is fully re-loadable. As long as you keep depositing Bitcoin, we will keep converting it and loading cash to your Cryptex Card.”, according to the company specifications.

“Bitcoin is the fastest way to transmit money but it is currently really prohibitive on where you can spend it and where you can turn it back into money for everyday use,” said to the Wall Street Journal, Jamon Rahn, Cryptex co-founder and Chief Executive Officer, in a telephone interview from Singapore. “Cryptex allows people to have greater convertibility of their bitcoin holdings.”

Cryptex said customers should receive their cards within four to six weeks of ordering them. That’s the only part about the groundbreaking card that isn’t fast, especially if you’re just like everyone else caught up in the hype and want one now (!), not later. Once it’s in your hands, you can use your Bitcoin ATM card just like you would any other prepaid debit card, instantly like cash, according to entreprenour.com.

Coverage
Cryptex is a Hong Kong outfit, and unsurprisingly its ATM debit card is tied to UnionPay – China’s only domestic bank card organization. The company says its card can be used to withdraw cash from more than 90% of ATMs installed in the US via the Discover Network. In addition, it should work with different ATMs in 80 countries worldwide – although which networks it uses is not clear. Effectively, if the ATM accepts UnionPay, the card should work.

In the U.S., Cryptex will impose daily limits on the amount of money that can be loaded on to a card in compliance with money transmitter rules.
For now, Cryptex can complete a conversion in around 24 hours. Mr. Rahn said he expects a fully automated process will be in place by the early summer to allow instantaneous conversion and card-loading for immediate use for ATM withdrawals or purchases. Cryptex hopes to trim that time down to “less than one minute by this summer.”

Currently, the card can only load dollars but Mr. Rahn says there are plans to build capabilities for other currencies.
Cryptex charges no fee for producing or delivering the card. Much like a traditional currency broker or bureau de change, it profits by charging an exchange rate above that at which it purchases dollars on bitcoin exchanges. Mr. Rahn said that more favorable rates will be available for customers who make larger purchases. Separate ATM fees will apply in most cases.

The debit card approach does have clear advantages over dedicated bitcoin ATMs, most notably the ability to withdraw from the many thousands of ATMs that already exist globally. However, they cannot process bitcoin transactions and you can’t top up a bitcoin debit card from a standard ATM.