This Monday (08), the cryptocurrency exchange Brazil Bitcoin launches an Elo flag card that allows payments with bitcoin (BTC) on a daily basis. The system will immediately convert the digital currency in the user’s possession to its equivalent in reais, and then process the purchase in physical or online machines. To better explain the launch of the new product, the Tecnoblog interviewed Marco Castellari, CEO of Brasil Bitcoin.
Amid the bitcoin boom in 2021, cryptocurrency reached its highest price in history. That said, its popularity has also grown and the number of users worldwide has skyrocketed. According to Castellari, bringing digital currencies to people’s everyday use is the mission that idealized the creation of Brasil Bitcoin and that is why the exchange is now launching this new card.
How does the card work?
Brasil Bitcoin’s card is intended for payments with cryptocurrencies. Initially, only bitcoin (BTC) will be supported, but Castellari estimates that within two months all other digital currencies in the exchange’s catalog will also be implemented. The request for the card is made through the broker’s application and its approval will happen gradually over 2021.
“In the beginning, we will only work with bitcoin. It’s a release, we still need to see your behavior. In addition, it is the main and largest digital currency on the market, so we will start with it. However, in a matter of two months we want to release all cryptocurrencies in the Brasil Bitcoin catalog for payments with the new card ”, said Castellari.
In practice, this card will allow you to go to the market, for example, to buy with bitcoin, regardless of whether the merchant accepts the cryptocurrency or not. In Brazil, the adhesion of merchants to payments with digital currencies is still minimal, so it is practically impossible to carry out daily transactions with them.
However, Brasil Bitcoin will immediately convert the user’s bitcoin balance to reais according to the quote at that time, so the merchant will normally receive for the purchase. Operating under the Elo banner, the new product will be accepted both in physical payment machines and in online purchases.
“The moment the purchase is being made, it will be deducted from the user’s account at Brasil Bitcoin. The priority will be to use the balance in reais that the customer may have first. If not, then the transaction will be automatically processed in bitcoin. The exact amount of BTC used in that transaction will also be notified ”, explains the CEO.
First cryptocurrency card that is not prepaid
Brasil Bitcoin’s innovation lies in automating the use of cryptocurrency in the user’s possession. “Our card is completely linked to your exchange balance. Other cards that currently exist work with two separate accounts, an exclusive one for payments to which the user must transfer funds ”, said Castellari.
In this way, other similar products on the market are, in reality, prepaid cards. “In our case, it is a single account and the process is automated”, says the CEO, also stating that, however small the difference may seem, it is a very important facility for users to use cryptocurrencies on a daily basis .
“Having to reload the prepaid card is not a laborious process, but it is something that can irritate the person. With the Brasil Bitcoin card, it will not be necessary to have to keep adding credits, the user will use the balance of his account on our platform, just as it is with traditional banks. There will also be no minimum purchase price ”, comments the CEO.
In addition, Castellari also explained in detail the fees applied to the transactions. Like any other card, payments have costs. However, the CEO said that initially Brasil Bitcoin will absorb all of them and the user will only pay for the sale of bitcoin, a percentage of 0.5%, as already happens if he does it inside the broker.
Bitcoin volatility could be initial problem
When asked about the expectation of joining the new card amid the extreme volatility that bitcoin presents, Castellari said that this is indeed a problem. Even so, he expects the new product to be used by its users since it also offers the option to pay with the balance in reais within the exchange.
“Today we see this big problem of volatility, which makes cryptocurrency less attractive to use on a daily basis. But there are also people, holders, who have this balance at a standstill and may end up using bitcoin on the card, ”said Castellari.
However, it is with the launch of stablecoins (more stable digital currencies, linked to some asset or fiat currency) for payments on the card that the CEO really expects to see broad adherence. “In a few months we will launch the other cryptocurrencies and one of them will be USDT, which is paired with the dollar, so it becomes very interesting for daily use since it is much more stable,” he said.
USDT to enable dollarization of personal finances
With the implementation of USDT for Brasil Bitcoin card payments, new possibilities will be opened up for personal finances. A user could, for example, convert part of his income to stablecoin and make daily payments with a cryptocurrency that has a dollar value. As the conversion is made to reais at the time of payment, it would not be necessary to dollarize the economy for this.
In addition, conversions from reais to dollars generally generate several fees and exchange transactions that take longer than the acquisition of cryptocurrencies. This is particularly interesting in times of high inflation and the devaluation of the national currency. Argentina is experiencing these problems at this time and that is why USDT is always among the three most used digital currencies in the neighboring country.
Brazil Bitcoin is on the way to becoming a digital bank
“Launching this card is part of Brasil Bitcoin’s process to become a bank, except for cryptocurrencies. Now, our customers can make purchases and subscribe with this option ”, says Castellari. He says that today the exchange allows for payment of slips and will now start to implement credit card transactions, even if the discount on the balance is made on the spot. This facilitates its virtual use, since there are few places that accept debit transactions.
At the moment, the biggest difference that exists between Brasil Bitcoin and conventional banks are TED or Pix transfers. “The user is not yet able to send or receive transfers from third parties, but we are already very close to a banking institution,” said Castellari.
He adds, stating that these issues will also be resolved in the future and that the user will be able to live exclusively with his account at Brasil Bitcoin, if he so wishes. “With this way of operating, we intend to reach 250 thousand people by 2022”, he concludes.