The freedom to control your assets or the comfort of traditional payments? Cryptocurrency users increasingly face this tough choice. Imagine this scenario: you pay for your morning coffee with a crypto card, but suddenly the transaction is declined because the exchange servicing the card has frozen withdrawals. Your money is locked with no access.
And this is not just a problem in the crypto world. In Spain, for example, banking rules require notifying the tax authorities before withdrawing more than 3,000 euros in cash, and failure to comply with this requirement can result in hefty fines. The essence remains unchanged: if you don't control your money, someone else does.
Two paths in the world of crypto cards
Currently, two main approaches to using cryptocurrency cards are forming: one assumes complete control over your cryptocurrency, while the other requires relinquishing some control in exchange for the convenience of traditional payments.
So, what to choose — freedom through self-custody of assets or the convenience of centralized crypto cards? Let’s delve into the differences, pros, and cons of each option.
Self-custody vs. centralized cards: what’s the difference?
A self-custody card connects to a non-custodial wallet where you store your private keys. This means only the cardholder has control over their funds.
There is no third party managing your cryptocurrency — that is, there is no bank-like organization to help recover a password. Such cards are often linked to decentralized platforms or hardware wallets and may require certain technical knowledge.
COMPARISON OF SELF-CUSTODY CARDS AND CENTRALIZED CRYPTO CARDS
Centralized crypto cards, on the other hand, are linked to custodial wallets. They are usually provided by centralized exchanges (CEX) or fintech companies that hold your cryptocurrency, manage private keys, and process payments.
In defense of freedom: the benefits of self-custody
Self-custody debit cards do not require users to store funds or top up in advance. Instead, the card uses smart contracts to verify transactions in seconds and interacts directly with the user's wallet. This way, you don’t have to give up ownership of your assets, ensuring instant resolution and transaction execution on the blockchain.
Unlike custodial cards, no third party holds your keys or can freeze your funds here. Some cards use smart contracts to authorize payments, enabling features like programmable spending, time-locked transactions, or multi-signature approvals. This can be useful for decentralized autonomous organizations (DAOs), freelancers, or joint accounts.
Users typically manage keys through hot wallets connected to the internet or cold wallets operating offline and based on hardware solutions. Each option offers different trade-offs between convenience and security.
Privacy is higher here: some protocols experiment with zero-knowledge proofs (ZK), particularly zk-SNARKs, to obfuscate spending patterns. However, implementation is in its early stages, and integration with point-of-sale systems remains limited.
Security relies entirely on the user. If private keys are lost, they cannot be recovered. Signing transactions, gas fees, and wallet compatibility add complexities. Some projects mitigate these difficulties by embedding wallets into physical cards or NFC devices, allowing keys to be stored offline and enabling one-touch payment functionality.
Interesting fact: when comparing centralized and decentralized crypto wallets, transaction fees can vary significantly. While decentralized wallets interact directly with the blockchain, providing greater transparency, but often at a higher cost, centralized wallets often batch transactions off-chain, reducing fees.
In defense of convenience: the benefits of centralized cards
There’s a reason why centralized crypto cards are so popular: they make cryptocurrency a tangible alternative payment method. Swipe the card, and your cryptocurrency is instantly converted to fiat money at the point of sale. The user doesn’t have to worry about gas fees, blockchain delays, or wallet compatibility.
The real appeal lies in how custodial wallets eliminate complexities. New users don’t need to manage seed phrases or understand blockchain mechanics — the provider handles the technical side and customer support, just like a bank.
Transactions are also quick and predictable, often accompanied by attractive incentives such as cryptocurrency cashback, staking rewards, or travel benefits. These cards are often linked to polished mobile apps where you can manage balances, freeze the card, track spending, and convert assets.
But this convenience comes at a price. Assets are under the control of the company, meaning they can restrict access, freeze funds, or be hacked. This is where the argument for convenience may lose out to self-custody, as many users suffered, especially after the Bybit hack of $1.4 billion in February 2025.
Like traditional banks, providers of centralized crypto cards may be forced to comply with regulations that can compromise user autonomy. For example, major cryptocurrency exchange Binance ceased offering Binance Visa debit cards in the European Economic Area (EEA) in 2023, citing regulatory reasons.
There are also privacy issues with crypto cards. Regulators often require customer identification processes (KYC), transaction tracking, and data sharing. For privacy-conscious users, this can be a decisive factor against using such cards.
Who risks more? A comparison of security
Centralized crypto cards may seem safe at first glance; after all, large companies often have reliable systems. But custodial wallets come with centralized risk: a single hack can jeopardize users' funds. Remember Mt. Gox, FTX, or Celsius. If the platform fails, users can lose everything.
At the same time, self-custody wallets reduce counterparty risk. There’s no company that can go bankrupt with your money. But it also means that you become the point of failure, especially if you lose your keys, as help is unavailable in that case.
Interesting fact: in some jurisdictions with strict currency controls, self-custody cards may offer a legal gray area for maintaining financial freedom, while centralized cards are often blocked due to local regulatory restrictions on cryptocurrency.
What to choose — self-custody or a centralized crypto card?
So, what to choose — freedom or convenience?
If you are new to cryptocurrencies or just want to spend your Bitcoin like fiat money, a centralized crypto card can be an excellent starting point. It simplifies all processes and smoothly integrates into your daily life.
But if privacy, control, and independence are important to you, a self-custody crypto card may require additional setup efforts.
Whatever path you choose, be aware of the privacy issues with crypto cards and be prepared for potential risks.