The Avalanche Foundation has launched the Avalanche Card, a Visa-based crypto card that allows users to make transactions in cryptocurrency at fiat-only accepting retailers. This initiative aims to bridge the gap between decentralized finance (DeFi) and daily transactions, making the use of crypto-assets more accessible in everyday life.
What is the Avalanche Card?
The Avalanche Card is a crypto-powered payment card created in partnership with Rain, a liquidity provider. It allows users to spend their digital assets anywhere Visa is accepted, making crypto payments as straightforward as swiping a credit card.
- Available as both a physical and digital card. - Supports AVAX, Wrapped AVAX (wAVAX), USDT, and USDC at launch. Future updates will introduce support for additional cryptocurrencies, including bridged Bitcoin and other tokens. - Crypto funds are converted to fiat when transactions are processed.
This product brings real-world utility to cryptocurrencies, allowing holders to pay for groceries, transportation, online shopping, and bills just like they would with traditional payment methods.
Why the Avalanche Card Matters?
Millions of people, especially in Latin America, Africa, and Southeast Asia, face high banking fees, inflation, and limited access to financial services. The Avalanche Card provides an alternative financial solution, enabling users to bypass traditional banking restrictions and use their crypto holdings for everyday transactions.
According to the Avalanche team, key benefits include:
- Empowering financial freedom in underbanked regions. - Reducing reliance on banks for cross-border payments and daily expenses. - Seamlessly integrating crypto into mainstream finance.
However, due to regulatory restrictions, residents of the following regions are not eligible:
- Cuba, Venezuela, Nicaragua - Russia, North Korea, Syria, Iran - Crimea, Luhansk, and Donetsk
Initially, the Avalanche Card is available in Latin America, the Caribbean, and 35 U.S. states, with 15 states excluded due to regulations.
How the Avalanche Card Works?
Unlike typical prepaid crypto debit cards, the Avalanche Card operates more like a credit card.
- Users load the card with crypto, which sets their spending limit at 50% of the USD value of their balance (to account for volatility). - The crypto isn’t instantly sold at the time of purchase. Instead, transactions accumulate and are settled once a day at a fixed time. - The card allows users to freeze their balance, dispute charges, change PINs, and set up spending alerts.
This delayed conversion model helps users maximize the value of their assets, ensuring they don’t sell their holdings at an inopportune moment due to market fluctuations.
Using the Avalanche Card may trigger tax obligations depending on the asset being spent. Spending USDC does not create a taxable event, whereas selling other cryptocurrencies to fund purchases may be taxable. Users are advised to consult tax professionals to determine their obligations.
