One of the biggest challenges of cryptocurrency is figuring out how to spend it. Currently very few providers are willing to accept cryptocurrency as a payment method and using it in day to day life is a challenge. Could Monaco finally get cryptocurrency into your wallet?
Cryptocurrency is great, you wouldn’t be here if you didn’t think so, but it has a couple of major problems. The first is that it can be fiendishly difficult to acquire and the second is that it’s. Slow transaction times and market volatility have slowed the rate of merchants opting to accept Bitcoin, Litecoin or others as a payment method.
Litepay was mooted as the potential solution to this problem but a disappointing launch has left questions over the team’s ability to deliver on their final promise of a visa powered card. One alternative is the ICO funded Monaco. Could Monaco finally get cryptocurrency into your back pocket?
Cryptocurrency Cards Have Traditionally Ran Into Serious Problems
There have been a number of attempts to create a card backed cryptocurrency and they’ve all run into problems. Generally both banks and card companies have proven to be hostile to cryptocurrency and have taken steps to prevent users from purchasing cryptocurrency using credit cards. The reasons for this are fairly solid, banks are concerned that by allowing users to buy a volatile asset on debt they are opening themselves up to an unacceptable level of potential risk. Other organizations have refused to accept cryptocurrency payments because they are concerned about falling foul of Anti money laundering and Know your customer regulations.
The most high profile example of a card company cracking down on cryptocurrency came in January 2018 when Visa terminated its agreement with WaveCrest. Visa stressed that the ban had nothing to do with cryptocurrency but rather to do with WaveCrest breaching visa operational rules. WaveCrest was directly responsible for a number of pre-paid cryptocurrency cards. Users were left in the lurch and it caused a great deal of upset among the cryptocurrency community.

This example helps to highlight the significant problems of any company that wants to attempt to combine cryptocurrency with a visa credit card. If they rely on another issuer then they will have to hope that the issuer is able to comply with Visa’s terms and conditions. If they themselves chose to work with Visa then they will have to take care not to fall foul of any of the terms and conditions.
What is Monaco Card And is it Useful?
The Monaco Card is a Visa-branded debit card that draws from a cryptocurrency-funded bank account, the monaco card is a Visa card so it has the same functionality as any other card. The card and Monaco bank account are free for existing cryptocurrency holders. In order to open an account, you simply sign up, verify your identity to comply with KYC and then transfer your cryptocurrency into the house. Currently Monaco is only available to customers in Asia with a wait list for European customers. Currently, as with many crypto innovations, customers in the United States can’t currently use Monaco.
The card was funded during an ICO in which over $26 million of MCO tokens were sold. These tokens act as a way for early investors to gain potential returns once the ICO is completed. Monaco takes 2% of every transaction on the network and stores this in the smart contract. It is then possible for users to “burn” their MCO in order to receive their equivalent share of all tokens currently stored in the Monaco smart contracts. MCO holders are also able to update to the limited edition Monaco card which has higher daily limits.
Monaco gets around some of the problems faced with Visa by ensuring that Visa is only ever used to process fiat transactions. Whenever a user wants to make a fiat payment the Monaco app will convert their cryptocurrency into fiat currency that they can then use to make the payment.
One of the main use-cases for Monaco is as a way to avoid traditionally expensive currency exchange rates. Rather than converting GBP to USD while you’re on holiday you will be able to use your Monaco card for a seamless fee free experience. Most interestingly the card will automatically default to the local fiat currency when making purchases. It also gives users the option of converting between multiple fiat currencies on the fly.
The entire premise of Monaco card is based on usability so it is heavily integrated with the Monaco app. This app allows users to top up their card and transfer cryptocurrency into their Monaco wallet. It also gives users an at a glance view of their balance.
One of the most interesting features Monaco offers is the ability to get cash-back. This a monthly 2% reward given to users in the form of MCO. The actual value of your cash back reward will vary with the value of hte MCO token. In other words if MOnaco is doing well your cashback will be worth more. It is also possible to trade your MCO token for other cryptocurrencies as soon as you receive your reward.
How Will Monaco Remain Compliant?
One of the biggest issues for other cryptocurrency cards has been complying with local regulations. In order to get around this Monaco has taken pains to to partner with establish industry leaders in order to provide the cards and the compliance purposes. The company physically producing the cards is Gemalto, an international card manufacturer with an established history of producing Visa cards.
One of the biggest problems is ensuring that they comply with Know Your Customer and Anti Money Laundering regulations. Most exchanges already collect this data on their users and Monaco have partnered with Thomson Reuters World-Check to help them ensure that they know who are they are doing business with. They have also enlisted the aid Jumio to take care of all ID verification services.
In order to ensure that they comply with Visa’s own terms and conditions Monaco Card has enlisted the assistance of a level-one PCI DSS-compliant Visa/Mastercard processor. This essentially means that they have a company that has all of the legal certifications required to be a full processor of Visa and mastercards.
Monaco has clearly taken pains to ensure that they don’t suffer the same fate as their successors but only time will tell whether they are capable of encouraging users to use their card on a long term basis.
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