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My brokerage sent me a debit card that's backed by the automatic margin loan on the shares I own. That doesn't mean I'm paying for pizza with AAPL shares. The
by pavlov 4y ago
My brokerage sent me a debit card that's backed by the automatic margin loan on the shares I own. That doesn't mean I'm paying for pizza with AAPL shares.
The "crypto debit card" is exactly the same thing.
- tiborsaas 4y agoI'm not a financial expert, but that does sound like you are paying with shares. If you didn't have shares you wouldn't have the balance or if you refuse to pay it back you'll lose some shares.
- pavlov 4y agoSure, the shares are collateral. If their value drops, the brokerage will sell them to cover the expenses I racked up on the Visa card. But it's not like the pizza I bought was priced in AAPL shares! It was priced in dollars. The margin loan isn't material to the payment system. It's the same situation with crypto debit cards. Anything you buy with such a card is priced in USD/EUR/whatever. The crypto behind the scenes makes no difference, just like the AAPL shares in my brokerage account. Hence these crypto-backed cards are not crypto payments in any sense — they're a financial product that already existed.