The card is among Mastercard’s premium products & might be used anywhere globally, added LVL CEO Chris Slaughter. However, on the other side, Mastercard hasn’t yet answered to requests for comment at the reporting time.
“It took us a few months to get [Mastercard] to be comfortable with it being linked to crypto,” Slaughter explained. “Convincing them that it had been aligned with their premium brand was more involved as their view on cryptocurrency associated businesses is that they’re transactional businesses, not member services businesses. … We’re a subscription service, which is analogous to having a premium card membership in Mastercard’s eyes.”
The debit card is a component of LVL’s aim to bring traditional banking services and digital assets closer together for the typical consumer. Earlier in November last year, the firm removed trading fees on its platform in favor of a subscription-based service. Slaughter added that he expects the debit card to get a “substantial portion” of the firm’s revenue.
On most exchanges, cash is held in “for benefit of” [FBO] accounts. Such accounts are opened within the company’s name and have sub-accounts for individual users. In contrast, Slaughter added, LVL offers deposit accounts that are opened within the customer’s name and can’t be managed by LVL.
LVL’s rear bank is Evolve Bank & Trust, a community bank based in West Memphis, Ark., that the exchange accesses through San Francisco fintech firm Synapse. [Synapse offers APIs that permit other firms to feature bank services like checking accounts to their platforms.]
“Other people want to do to cryptocurrency-linked debit cards but [LVL] is among the fastest to plug on this,” added Synapse CEO Sankaet Pathak. “One functionality that folks constantly desire within the cryptocurrency space is the same thing that happened with E-Trade and Schwab – they need deposit capabilities, direct deposit and card issuance associated to their accounts.”
Within recent few months, businesses like p2p cryptocurrency marketplace Paxful, digital investment platform Bitpanda and Manhattan-based bank Quontic have launched or announced plans to launch debit cards associated to cryptocurrency accounts.
Last month, BlockFi revealed plans for a Bitcoin [BTC, +2.76%] rewards credit card.
“A lot of the debit cards that exist within the cryptocurrency ecosystem are the type that are oriented around this concept of paying your crypto, which a minimum of clients at BlockFi aren’t curious about doing,” CEO Zack Prince added within his recent official interview.