Singapore-based start-up takes bitcoin into real world

A recurring challenge for bitcoin and other cryptocurrencies is how to make them work in the real world. A Singapore-based start-up says the answer is its Visa card.

TenX is pitching its debit card as an instant converter of multiple digital currencies into fiat money: the dollars, yen and euros that power most daily commerce. TenX said it takes a 2 per cent cut from each transaction and has received orders for more than 10,000 cards.

While transactions are capped at US$2,000 (S$2,720) a year, users can apply to increase the limit if they undergo identity verification procedures.  TenX's bid to make digital currencies easier to spend comes amid volatility and infighting within the cryptocurrency community. Bitcoin, the most popular, slumped after hitting a record last month amid concerns about a split, but recovered as fears faded.

TenX has built an app that serves as a digital wallet connected to the Visa card so that when it is swiped at a cafe or restaurant, the merchant is paid in local currency and the user's crypto-account is debited.

"You're mixing two worlds that are night and day," said TenX co-founder Julian Hosp. "When the user spends the cryptocurrency, we have to instantly switch these currencies to fiat and pay to Visa... It's a lot of pathways."

Mr Hosp said transactions are processed immediately and it does not impose any charges on top of the conversion fee that is set by cryptocurrency exchanges, which typically is 0.15 to 0.2 per cent.

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.

Each month, TenX processes about US$100,000 in transactions. By the end of next year, it is targeting US$100 million in monthly transactions and a million users. 

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

"It's an incredible concept," said Mr Greenspan. "At the end of the day, it's going to depend a lot on customer relations."

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A version of this article appeared in the print edition of The Straits Times on July 25, 2017, with the headline 'Singapore-based start-up takes bitcoin into real world'. Print Edition | Subscribe