8 Major Bitcoin Debit Cards Explained: How Private and Anonymous Are They?

Cointelegraph reached out to eight major Bitcoin debit card providers with one question: Can Bitcoin debit cards really be private or anonymous? Here are the results, broken down by region and level of disclosure required.

Financial Privacy: Bitcoin vs. Banks

One of the main advantages of Bitcoin over traditional financing methods is privacy. When a Bitcoin transaction is sent, its record is permanent and public on the blockchain and is not linked to any specific identity.

Many users, such as those who frequented Silk Road, like Bitcoin for this reason: Bitcoin is anonymous and private.

However, one of the main challenges of using Bitcoin is the limited number of merchants and services that accept Bitcoin as a payment method. Using a Bitcoin debit card, you can convert Bitcoin into currency to use when purchasing products at traditional merchants.

The challenge with Bitcoin debit cards is that, in general, they tend to require the same level of financial disclosure as traditional financial institutions.

While this is an advantage to banks, which are able to close customer accounts at any time and for any reason (especially under government pressure), it still does not constitute financial privacy.

Full identification information (US)

Coinbase

Coinbase has a debit card, the Shift card, which allows users to withdraw Bitcoin directly from their Coinbase wallets for transactions. This is very convenient because it allows customers to avoid having to separate their Bitcoin wallets from their card wallets, and avoids customers having to top up their Coinbase wallets before trading, instead making the use of Shift a unified and simplified process. In this sense, Shift is the closest thing to a true Bitcoin debit card.

Unfortunately, the Shift card isn’t available in all states in the US, so potential users in New Hampshire, Connecticut, New York, Hawaii, Maryland, Georgia, West Virginia, Minnesota, and Arkansas are out of luck.

In terms of privacy, Coinbase is fully compliant with AML/KYC regulations and therefore requires full user identity. We attempted to contact Coinbase regarding privacy concerns regarding the Bitcoin debit card, but a Coinbase representative declined to comment.

BitPay

Currently, BitPay is the only Bitcoin debit card available in all 50 states of the U.S. Unlike Coinbase’s Shift Card, and like the other debit cards on this list, the BitPay debit card is a prepaid card with a traditional currency balance (converted from Bitcoin).

BitPay requires full identity information in order to use its card. However, unlike other cards, it does not require submission of any identification documents. Instead, BitPay requires users to submit their Social Security Number during the application process. While this amounts to the same level of financial disclosure as any other card, it is still a greatly simplified process, making BitPay the easiest Bitcoin debit card to obtain.

When contacted, a BitPay representative declined to be quoted for comment, however, he responded to questions about privacy from a terms perspective:

"Federal law requires all financial institutions and their third parties to obtain, verify and record information to identify each person who obtains a card. What this means is this: When you apply for a card, we will ask for your name, address, date of birth, Social Security number or state identification number and other information that allows us to identify you. We may also ask to see your driver's license or other document with your photo that can verify your identity."

Full identity information (EU, etc.)

Xapo

A major card used in Europe and elsewhere, the Xapo card is so named because it is accepted by Uber in Argentina, which was denied service by traditional card companies. The list of countries where the card can be used is not very long, the most important of which is the United States, where it also requires full financial disclosure.

Xapo product manager Anni Rautio does not believe that Bitcoin debit cards will achieve financial anonymity unless Bitcoin is used for prepaid debit cards.

As long as debit cards - Bitcoin or otherwise - are connected to a long-standing player in the market, like Visa or MasterCard, it's impossible to be 100% anonymous. The only "anonymous" debit cards I can think of are the prepaid/preloaded debit cards you can buy at places like CVS. However, they function more like a gift card and are inconvenient in the long run.

Rautio noted that the main point behind these cards is not to maximize privacy but to maximize convenience.

“I think the balance between anonymity — or privacy to some extent — and convenience is providing personal information. Some people value convenience over anonymity, and others value anonymity over convenience.

Xapo’s goal is to bring Bitcoin to the everyday lives of people around the world. Our bet is that this can only happen if we can make Bitcoin accessible, easy to understand, and ‘mainstream’ enough that mass adoption of Bitcoin can continue. Today that means we’re choosing to offer a highly convenient product over a more niche approach to anonymity.”

SatoshiTango

Another card used by Uber Argentina is the SatoshiTango card, which also requires full financial identification. This card is available in most countries except the United States.

SatoshiTango CEO Matias Bari explained that their card still requires some identification, but it is less stringent than banks’ requirements.

Bari said:

“To open an account at SatoshiTango, you will need to verify your identity using proof of ID and proof of address. We need to apply appropriate KYC and AML policies to comply with international regulations. You do not require the same level of verification as bank account holders, but you cannot request a prepaid card or buy and sell Bitcoin without letting us know your identity.”

Bitwala

Another premier Bitcoin debit card from a company that has made a name for itself by using Bitcoin to pay bills, the Bitwala card is not available in the United States. It is worth noting that this card is quite unique among all the cards mentioned here, as Bitwala is integrated with the ShapeShift exchange. This means that users can top up their debit cards with cryptocurrencies other than Bitcoin.

Jeff Gallas of Bitwala explained that their card requires a common form of ID, which is likely true for all current Bitcoin debit cards.

He said:

“As far as we know, all Bitcoin debit cards currently on the market require some type of identity verification. For Bitwala’s Bitcoin debit cards (physical and virtual), we are required to go through certain AML/KYC requirements, including verification of customer details.”

However, Gallas mentioned that in the future, Bitwala may be able to provide a solution for those who don’t have the correct form of government ID.

He noted:

“We are working on a solution specifically for the so-called ‘unbanked’, who don’t always have the required documentation (for example, they don’t actually have the right identification documents). Such a card can be obtained with just some basic information, but the total transfer limit of the card will be limited.”

CryptoPay

Used primarily in Europe, the CryptoPay Bitcoin debit card is identical to other cards in many ways. It is also not available in the United States and requires some form of identification for unrestricted use.

CryptoPay CEO George Basiladze pointed out that all cards in the European Union must comply with similar regulations:

“There are common KYC and AML requirements for debit card issuance across Europe.”

Wirex

Finally, Wirex, which recently rebranded from E-Coin, offers a Bitcoin debit card in a similar style to other cards, with an easily accessible app. This also means that the Wirex card must comply with the same identification regulations as the rest of the cards.

Limited privacy options

CryptoPay

As mentioned earlier, CryptoPay requires identification to unlock unrestricted users. However, they do offer an option for unverified cards. This means that customers do not need to provide financial supervision if they keep the card valid for a very short period of time.

Asked if Bitcoin debit cards could be private or anonymous, CryptoPay CEO George Basiladze added that privacy could be ensured if users were willing to use cards with shorter expiration dates (without revealing identity documents).

He said:

"For unverified users, their cards have very low limits (only €2,500), while verified users have higher limits."

Basiladze also spoke out against Bitcoin debit cards that pretend to offer full service without verification.

He said:

"Debit card providers offer full, unlimited and anonymous cards. When this happens, it means that the operator is either breaking the law or lying. Therefore, users should avoid using such cards."

Wirex

Similar to CryptoPay, Wirex not only provides full-service cards after identity verification, but also allows users to not verify for a period of time.

Dmitry and George from Wirex confirmed in comments that Bitcoin debit cards can be private/anonymous if lower limits are acceptable.

They said:

“At this point, technically, Bitcoin debit cards can be private and anonymous. As long as the user is comfortable with a low limit, no documentation is required.”

Sadly, according to Dmitry and George, the world of fully private Bitcoin debit cards may soon come to an end as government identification regulations become mandatory for all users.

They said:

“Nevertheless, the prepaid card industry is becoming increasingly regulated. For example, limits for unverified cardholders are being lowered very quickly. Many reports have attempted to establish a link between prepaid cards and fraud/other illegal activities. As a result, we won’t see anonymous debit cards in the near future, at least not from the Visa/MasterCard platform.”

Complete privacy?

On the extreme end of the privacy spectrum is BitPlastic, which has a very simple website that's reminiscent of early e-commerce sites.

The lengthy FAQ promises complete anonymity for all cards, but instead raises all sorts of red flags, including a one-time $3,500 nonrefundable surcharge, no refunds once shipped, no ability to transfer balances, zero recourse if the pin is lost, no help if the card is lost, and a 5% chance that the card will be lost in the mail or seized by customs (in which case there will be no refund).

The Best Private Bitcoin Debit Card Solutions

Even though there is no perfect privacy solution for Bitcoin debit cards, a workable compromise can be reached. Users who wish to maintain privacy can get an unverified card, or simply get multiple unverified cards and switch to another one when they reach their limit.

While this method may be inconvenient for more frequent users (who may switch to a new card every month or more), card usage can be kept to a minimum if large bills are split up, all possible charges are paid directly in Bitcoin, and almost all other purchases are handled with Bitcoin gift cards or cash. Using a Bitcoin debit card in this way, an unverified card can last for more than a year.

Alternatively, some customers may want an unlimited card, but still want the added privacy that full verification normally provides.Another approach for those with two or more citizenships is to have the card verified under one citizenship, denominated in the currency of the country where the customer actually lives and works.

This ensures that financial activity is only visible to government agencies with which the citizen is currently interacting, ensuring that no single party knows too much about the citizen's privacy.

If you want to learn more about Bitcoin debit cards, read our previous article on the subject.