Want To Pay Your Bills With Cryptocurrency? Here’s How
Written by
Karen Doyle
Edited by
Amen Oyiboke
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Cryptocurrency is a hot topic these days, and its price is closely followed along with other markets. But are there real-world applications for cryptocurrency beyond trading it? There are, and you can start with something as mundane as paying your bills.
Here’s what you need to know about how to pay your bills with cryptocurrency.
What Is Cryptocurrency?
Cryptocurrency is defined as a digital currency that is decentralized and designed to be used over the internet a large crypto platform. Its value rises and falls based on trading, much like the stock market, as opposed to traditional currencies that are backed by a government.
How To Buy Crypto
You buy and sell crypto on an online exchange, using an app like Coinbase. There are several different cryptocurrencies. Some of the most popular include bitcoin, dogecoin, litecoin, and ethereum. You can buy or sell crypto using U.S. dollars or most other currencies.
The price of each cryptocurrency will fluctuate daily, and this volatility is one of the drawbacks of crypto. Make sure you understand the cost of the type of crypt you’re buying. For example, as of March 22, one bitcoin was trading at $84,009.65, and one dogecoin was trading at 17 cents.
Crypto Wallets
You’ll need a wallet to hold your cryptocurrency. Since crypto is not physical currency, like bills and coins, you will need a virtual wallet, into which your private crypto keys will be deposited when you purchase crypto.
There are hardware (cold) and software (hot) crypto wallets. Hardware wallets are physical devices, similar to a USB drive or a hardware ‘safe. Trezor, Blockstream, and Ledger are companies that make hardware crypto wallets. Makers of hardware wallets tout their security as keys are stored on a secure device as opposed to on an app.
Software wallets are provided by crypto apps like Coinbase, Binance, and Trust Wallet. These app-based wallets are easier to use and more convenient than hardware wallets as you can buy, sell, and trade crypto on your phone.
These apps offer different features related to bill paying; for example, Coinbase offers a debit card which you can use to set up automatic payments for bills like utilities and subscriptions.
Several crypto apps are specifically designed for paying bills. BitPay and CoinGate are two examples. Binance has BinancePay for bill payments.
Paying Bills With Crypto
Now that you have purchased crypto and stored it on your wallet, it’s time to use it to pay your bills. Not all vendors accept crypto as payment directly now, but more and more companies are moving toward it as it increases in popularity.
Check with the company you are paying to see if they will accept crypto payments directly, If not, you may need to use a third-party platform to facilitate the transaction. Some of these charge a transaction fee, so be sure to compare the costs of the different methods that are available to you.
Depending on the company or organization you are paying, you may be able to pay these bills with crypto, either directly or through a third-party payment platform:
- Rent or mortgage
- Utilities
- Car payment
- Subscriptions
- Utilities
- Credit card bills
You may not be able to pay all your bills with crypto today, or it may not be cost-effective to do so. But given the increasing popularity of bitcoin, ethereum and other cryptocurrencies, the day when virtual currencies are used to pay for nearly everything may not be far off.
Questions To Help You Out
Can I use crypto to pay my bills?
Yes. Many companies can accept crypto payments directly, and for those that don’t, you may be able to use a third-party payment processor to pay bills with crypto.
How do I convert my crypto to cash?
The app or wallet you use to buy and store crypto should have an option for you to sell your crypto and specify the currency you want to receive in exchange.
How do you use cryptocurrency for payments?
You can pay directly with cryptocurrency if the receiving business accepts it, or you can use a third-party payment processor that accepts crypto and pays the recipient in dollars or another currency.
Do banks accept crypto as payment?
Most U.S. banks do not accept cryptocurrency as payment, but this is changing. As digital currency becomes more popular, banks are beginning to offer crypto-related services and will likely accept crypto in the future.
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