Upstart Cryptocurrency Exchange LVL opens pre-orders for a Mastercard debit card linked to Bitcoin and Fiat accounts.
The card is one of Mastercard’s premium products and can be used anywhere around the world, said Chris Slaughter, CEO of LVL. Mastercard did not respond to requests for comments at the time of going to press.
“It took us a few months to do it [Mastercard] to familiarize yourself with that it is linked to crypto, ”Slaughter said. “Convincing them that it was in line with their premium brand was more important as they view crypto businesses as a transaction company rather than a member service business. … We are a subscription service which, in the eyes of Mastercard, is equivalent to a premium card membership. ”
The debit card is part of LVL’s goal of bringing traditional banking services and crypto closer together for the average consumer. In November 2020, the company removed trading fees on its platform in favor of a subscription-based service. Slaughter expects the debit card to generate a “significant portion” of the company’s revenue.
On most exchanges, cash is held in FBO (for Benefit of) accounts. Such accounts are opened on behalf of the company and have sub-accounts for individual users. In contrast, according to Slaughter, LVL offers sight deposit accounts that are opened on behalf of the client and cannot be controlled by LVL.
LVL’s back-end bank is Evolve Bank & Trust, a community bank based in West Memphis, Ark., Accessed by the exchange through the San Francisco fintech company Synapse. (Synapse provides APIs that allow other companies to add banking services such as checking accounts to their platforms.)
“But other people want crypto-linked debit cards [LVL] this is the quickest way to market, “said Sankaet Pathak, CEO of Synapse. “One functionality that people in the crypto room want all the time is the same as with E-Trade and Schwab – they want deposit options, direct deposit and card issuance linked to their accounts.”
Last month, BlockFi announced plans for a bitcoin reward credit card.
“Many of the debit cards in the crypto ecosystem are geared towards this idea of issuing your crypto, which at least customers at BlockFi are not interested in,” said CEO Zack Prince CoinDesk in an interview with Die Zeit.
