Crypto.com guts its Visa Card rewards program; CRO token drops 19%
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The company is implementing three changes: reduced card rewards, the addition of a monthly card rewards cap and the phasing-out of its staking rewards.
Editor’s note: Crypto.com has now pulled back on this decision and its planned cutbacks, saying on Twitter, “Instead of eliminating card staking earn rates completely, we will offer a more balanced approach.” Read more on that feed.
Crypto.com announced over the weekend major changes to its Visa Card rewards program. Starting June 1, cardholders will see drastic cuts to the reward amounts they can earn, as the company tries to balance cardholder benefits with the long-term growth of its crypto-linked card program.
Users shared their dismay online, and Cronos (CRO) — Crypto.com’s native token — has fallen 19% as of this writing.
Crypto rewards have been more lucrative than traditional bank savings or credit rewards programs. But one of the biggest offerers cutting back means that might change.
What is the Crypto.com Visa Card?
The Crypto.com Visa Card is a no-annual-fee prepaid debit card that Crypto.com launched in 2018. The program lets cardholders earn rewards in Cronos (CRO) on each purchase. Think of it like a cashback debit or credit card.
CRO card rewards on purchases have ranged from 1% to 8% back depending on the card tier you choose. Cardholders can also earn a percentage back from their staked amount. And like a conventional debit card, cardholders can withdraw cash for free from any ATM within the Visa network.
Crypto.com offers five tiers of cards, each with their own card benefits and staking requirements. Crypto staking is the process of locking up crypto holdings for a set period to get rewards or earn interest. For Crypto.com, that period is six months for all its cards.
Basically, the more CRO you stake, the higher your CRO rewards. For instance, prior to these recent revisions, cardholders who wanted to earn the 8% back would need to stake $400,000 in CRO.
The amount you stake is separate from the funds you add to your card for purchases. Crypto.com lets cardholders “top up” their cards with either cash or crypto. Crypto.com automatically converts the crypto to cash.
In addition, eligible cardholders can earn perks like reimbursements for Netflix, Amazon Prime and Spotify, and discounts on bookings through Airbnb and Expedia.
Crypto.com effectively slashed its CRO rewards program, reducing the amount of rewards cardholders can earn from their purchases. Effective June 1, 2022, the company will be implementing three major changes, including reducing its CRO card rewards, adding a monthly CRO card rewards cap and phasing out its CRO staking rewards.
Crypto.com’s previous rewards structure:
|Card tier||CRO rewards – No stake||CRO rewards – Active stake|
|Royal Indigo / Jade Green||1.5%||3%|
|Icy White / Frosted Rose Gold||1.75%||5%|
Crypto.com’s new rewards structure:
|Card tier||Revised CRO rewards – No stake||Revised CRO rewards – Active stake||Monthly CRO card rewards cap|
|Royal Indigo / Jade Green||0%||1.5%||$50|
|Icy White / Frosted Rose Gold||1%||3%||None|
According to Crypto.com, none of these changes will apply to cardholders with an active six-month stake and who staked before May 1, 2022 by 1:00 p.m. UTC. These cardholders will continue to earn CRO Card rewards on spending at the current rate and will continue to receive their CRO staking rewards until their stakes expire, upon which time the newly revised rates will apply.
There will be no changes to other card benefits, Crypto.com said. Eligible cardholders will still receive reimbursements for monthly subscription services and discounts on bookings through Airbnb and Expedia.
CRO token plummets 19%
Revisions to Crypto.com’s Visa Card rewards program sent its token prices plunging Sunday morning as much as 15%, declining from $.354627 to $.300173 in five hours, according to data from CoinDesk.
Despite a brief recovery early Monday, the coin failed to gain enough positive momentum to reverse its lagging price. The coin is trading at $0.282118 at the time of this writing, down more than 19% since the announcement.
Crypto staking and related rewards have been more lucrative than traditional bank savings or rewards programs, and Crypto.com’s program is one of the world’s most popular crypto-linked card programs.
So why are these changes happening?
The company didn’t expand too much on why it was implementing these changes other than saying they were to help “ensure long-term sustainability” of the program. With one of the biggest offerers cutting back, it could cast doubt on these programs.
A little over a month ago, Fortune reported on staking and its prospects for crypto businesses, with a top expert saying he expects staking to become “a big business.”
Indeed, crypto exchange Coinbase said in February when it released its quarterly earnings that staking was one of its leading products aside from crypto trading.
Like crypto itself, the future of staking and crypto rewards remains to be seen. But this could always just be an individual issue with Crypto.com’s program, rather than a systemic issue facing the future of staking and crypto-related rewards.
Interested in cryptocurrency? Learn more about the basics with our beginner’s guide to Bitcoin, dive deeper by learning about Ethereum and see what blockchain can do with our simple guide to DeFi.
At the time of publication, Matt Miczulski did not own shares of any crypto mentioned in this story.