Singapore Startup Launches Cryptocurrency Debit Card

A Singapore startup called TenX has designed a Visa card capable of debiting users’ cryptocurrency wallets, allowing them to pay for goods at brick-and-motor merchants with bitcoin, Ethereum and a handful of other digital currencies, according to Bloomberg.

The question now is: Will anybody use it?

TenX’s business model is straightforward: It allows its users to pay for goods in a given fiat currency, then “instantly converts” cryptocurrency from their wallet into the amount needed to cover the transaction.

To be sure, this isn’t the first digital-currency debt card: Two other startups, CryptoPay and Xapo, are selling similar products that focus exclusively on bitcoin. Being limited to bitcoin is obviously problematic for traders who don’t want to miss out on a single tick of the broad-based crypto rally, which Goldman believes will carry BTC to the moon (or at least to $3,600) by year’s end. But TenX’s promise of “instantaneous conversion” is already tempting users. The company says it’s processing 100,000 transactions a month, which is significant, considering bitcoin and Ethereum combined have a market capitalization of about $60 billion. The owners of most of this wealth treat it like an investment, not a system for payments – and it’s that attitude that TenX will likely find to be the biggest obstacle in its quest to 100x its current volume to $100 million a month.

Another flaw: Transactions are capped at $2,000 a year though users can apply for a higher limit if they undergo identify verification, something that crypto enthusiasts might balk at. And with bitcoin’s future far from assured, picking the right mix of cryptocurrencies presents another business risk.

“TenX’s bid to make digital currencies easier to spend comes amid massive volatility and infighting within the cryptocurrency community. Bitcoin, the most popular, slumped after reaching a record in June amid concerns about a split in two, only to recover as fears faded. The company has built an app that serves as a digital wallet connected to the Visa card so that when it’s swiped at a cafe or restaurant, the merchant is paid in local currency and the users’ crypto account is debited.”

Despite its purported ease of use, even company officials admit that the network undergirding its system is complex – perhaps unnecessarily so. But on top of the 2% transaction fee it collects from merchants, customers only pay a 15 to 20 basis point conversion fee levied by the exchange.  

“’You’re mixing two worlds that are night and day,” co-founder Julian Hosp said in an interview. ‘When the user spends the cryptocurrency, we have to instantly switch these currencies to fiat and pay to Visa straight away. It’s a lot of pathways.’


Hosp said transactions are processed immediately and it doesn’t impose any charges on top of the conversion fee that is set by cryptocurrency exchanges, which typically is 0.15 to 0.2 percent. The card now supports eight digital currencies, including the lesser-known dash and augur, and aims to offer about 11 of them by the end of the year.”

TenX, like all companies working on payments solutions involving cryptocurrency, also risks being pushed out of the market by a larger rival with deeper pockets and more entrenched connections in the payments space.

“'TenX has an advantage in moving early, but the startup can expect competition in the future from major financial institutions and venture capitalists with deeper pockets and direct access to clients and databases,' said Mati Greenspan, a Tel Aviv, Israel-based analyst at social trading platform eToro.


‘It’s an incredible concept,’ said Greenspan. ‘At the end of the day, it’s going to depend a lot on customer relations. Are they meeting the customers’ expectations? Can somebody else do it better?’”

Last month, the firm raised $80 million worth of Ethereum through an initial coin offering. It plans to spend half of that money to expand, and the other half to launch its own digital-currency exchange. Before that, it raised $120,000 from angel investors and $1 million Fenbushi Capital, which lists Ethereum creator Vitalik Buterin as a general partner.