- Tezos has announced a non-custodial Mastercard crypto debit card through Baanx
- The card allows users to spend cryptocurrency directly from their wallets without a third-party custodian
- Supported by the Tezos Foundation, the card will be accepted at over 110 million merchants globally
Tezos has announced a non-custodial crypto debit card through Baanx, the UK-based outfit it has financially backed since 2019. The collaboration aims to revolutionize how crypto transactions are conducted, allowing users to spend their cryptocurrency directly from their wallets without relying on a third-party custodian. The debit card, supported by the Tezos Foundation, will be accepted at over 110 million merchants worldwide who accept Mastercard.
Non-custodial Cards Offer Extra Dimension
To date, crypto debit cards have been custodial in nature, with users needing to send their funds to the app connected to the service provider in order to use them. In contrast, a non-custodial crypto debit card allows users to spend their cryptocurrency directly from their preferred wallet without relying on a third-party custodian. This system offers convenience, control, and security, appealing to both crypto enthusiasts and everyday users.
When making a purchase, the transaction is initiated by swiping the card or entering card details at the point of payment. The amount is instantly converted from cryptocurrency to the local fiat currency of the merchant, handled by a service provider or exchange. The card issuer, in partnership with networks like Mastercard, authorizes the transaction by checking the user’s wallet balance in real time.
Once authorized, the cryptocurrency is deducted from the user’s wallet, and the equivalent fiat amount is transferred to the merchant.
Multiple Benefits
Non-custodial debit cards offer several benefits over custodial cards, prime among them being the fact that users don’t need to rely on the issuing company to hold their funds; they can keep them in a number of non-custodial wallets.
Non-custodial systems enhance security as users control their private keys, reducing the risk of third-party breaches. Transactions are recorded on the blockchain, ensuring transparency and traceability.
The Tezos-branded, non-custodial debit card will process transactions via Etherlink, an Ethereum-compatible layer-2 blockchain powered by Tezos Smart Rollups technology. This integration promises rapid and cost-effective payments.
Mastercard and Baanx are also reportedly developing a MetaMask debit card, and DeFi firm 1Inch already operates a similar card. Baanx’s collaboration with Tezos dates back over four years, with the Tezos Foundation participating in previous Baanx funding rounds.
