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The blockchain-based crypto currency, which has attracted the interest of investors and financial services companies, has a challenge. It can be difficult to withdraw this currency as a regular currency. But there are new services on the horizon that help people use bitcoin and other digital currencies in their main ways.

See how these banking services can be used for cryptocurrency, as well as their advantages and disadvantages.

What is Cryptop Banking?

The word crypto bank The exchange companies and companies that provide these services are not technical banks, but in general, the ways in which consumers can manage their confidentiality can be considered a misnomer. At this stage, this type of banking service allows people to keep their money in a digital wallet or withdraw it as a traditional currency.

Benefits of cryptocurrency banking

This is the main advantage of this type of bank cryptocurrency debit cards. They allow you to use your digital coin account like any other currency to make daily purchases or withdraw money instead of keeping it as an investment.

These debit cards can only be issued to retailers who choose to accept or sell your cryptocurrency in dollars before it is available. It now allows financial technology companies to partner with charter banks and / or debit card providers to use their partner’s logistics and control framework to sell your cryptocurrency in the background and convert it into dollars and accept it from retailers. This means that your digital money will be accepted by many standard debit cards.

Barriers to cryptocurrency banking

Probably the biggest obstacle to borrowing and issuing cryptocurrency is flexibility. The same barrier to investing is that you have to accept the words, “If you lose your coin, you will lose a lot of money.”

Many banks rely on stable exchange rates to borrow, lend, or raise interest rates, but at the moment those things cannot be done in cryptocurrency in a stable or secure way.

And in order to use your digital coin, you need to accept the risk that the price may increase after you withdraw it, because your transactions are based on the real world value of your current coin. For example, after buying a $ 5 sandwich, your price for a laptop doubles, which means you effectively spend $ 10. But the value can be reduced, which is a good deal for previous purchases.

Another factor to consider is that regulators are still evaluating Cryptotex Fintex. The U.S. Securities and Exchange Commission (SEC) recently announced plans to sue Coinbase, one of the world’s largest exchange companies, and Coinbase has canceled its launch.

Consumers should know that using a crypto debit card is an internal tax service event because the cardholder is technically selling it when making transactions with their debit card. Some card issuers may automatically generate 1099 forms for their customers to use when filing a tax return, but the consumer is still responsible for monitoring their tax liability.

How to try cryptocurrency banking

To start using these types of banking services, you first need to do it Buying cryptocurrencyCash App, Coinbase and PayPal are companies that have applications that make it easy to buy and sell cryptocurrencies, even in small amounts. Put it in a digital bag.

If you want to easily withdraw your balance, you need to open an account with a company that offers crypto debit cards and uses your own digital currency. Coinbase, First, has a special debit card that allows customers to withdraw any Coinbase assets and receive cryptocurrency rewards, but there is currently a waiting list for new customers. BitPay, another company, offers prepaid MasterCard debit cards that customers can use to deposit their digital money. There are others, but it is not a large bank.

In the future, cryptocurrency may have the potential to become a peer-to-peer loan source, where individuals can quickly and securely lend to each other, according to CB Insights Research. This is a huge area of ​​untapped potential but today the world of cryptocurrency banking is limited by a pool of players with some of the most innovative products and services.

This article was written by Nerd Wallet and was first published by the Associated Press. The author made no mention of the warranty mentioned at the time of its publication.

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Chanelle Bessette writes to Nerd Wallet. Email Cbessette@nerdwallet.com

The article first appeared on Nerlet Wallet on how to bank your digital coin from crypto currency to cash.

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