In Montenegro, cryptocurrency transactions operate in a regulatory vacuum, with unverified intermediaries facilitating anonymous cash-for-crypto exchanges on the streets of Podgorica. A BIRN investigation documented a typical transaction: 70 USDT swapped for €60 cash in minutes, with no questions asked about fund origins. These over-the-counter (OTC) deals, often arranged via Telegram groups, bypass banks and legal oversight.  

Blockchain analysis revealed one trader’s wallet handled millions in transactions over a year, with a quarter flagged as medium-to-high risk—including ties to frozen or sanctioned funds. Traders include locals and foreigners from Russia, Ukraine, and Turkey, who rely on cash exchanges due to banking access barriers.  

Despite 2025 anti-money laundering amendments requiring KYC checks for transactions over €1,000, enforcement remains absent. Montenegro’s EU-aligned crypto laws are pending, aiming to regulate service providers and enable tax oversight. For now, the gray market thrives, unregistered and unchecked.

<html><head></head><body>In Montenegro, cryptocurrency trading remains in a regulatory vacuum. People conduct transactions through offline cash dealings and unverified intermediaries to circumvent legal oversight.A trader posts an advertisement on social media, and both parties arrange the transaction details via chat software—within just a few minutes, 70 USDT is transferred from one crypto wallet to another, while 60 euros in cash are exchanged on the bustling streets of Podgorica (the capital of Montenegro). A fee of 5 euros is charged, with no questions asked and no inquiries about the source of funds.After the transaction is completed, both parties quickly shake hands and depart. The trader mentions that he has other clients waiting for his services.This scene is a true portrayal of Montenegro's cryptocurrency "gray area": cryptocurrencies are exchanged for cash outside the purview of legal regulation, with undercurrents flowing.<div><img style="max-width:100%;overflow:hidden;" src="https://d1x7dwosqaosdj.cloudfront.net/images/2025-12/e39caf5e3c76499dbc72eb8628a5ea69.jpg" alt=""></div><h3>Anonymity, Cash, and High Risks</h3>In fact, although Montenegro has promised to enact digital asset regulatory laws since 2020, they have yet to materialize.While transferring funds from bank accounts to crypto trading platforms is not illegal in itself, cryptocurrencies cannot be converted into fiat currency through banks or registered exchange institutions.At this point, intermediary platforms, Telegram groups, and online forums become the main channels for transactions—so-called "over-the-counter" (OTC) trading. Transactions are typically completed offline, with cryptocurrencies and cash exchanged directly and without any identity verification.According to statistics from the blockchain forensics and crypto risk assessment platform "Global Ledger," the crypto wallet address involved in BIRN's transaction handled transactions worth millions of euros between October 2024 and October 2025. The largest single incoming transaction was $440,000, while the largest outgoing transaction exceeded $500,000.Most of these transactions were conducted through well-known crypto platforms such as Binance and Gate.io, with about 75% of the activity occurring on low-risk platforms. However, a quarter of the transactions were classified as medium to high risk, including dealings with "frozen funds" (assets linked to frozen or sanctioned wallets) and entities sanctioned by the U.S. Financial Crimes Enforcement Network (FinCEN). Global Ledger rated the risk level of the trader's crypto wallet as "medium.""In Podgorica, ask anyone involved in cryptocurrencies—everyone has their own 'dealer,'" said Ivan Jolicic, developer of Montenegro's digital currency Perper and a crypto expert. These dealers are not only locals but also include many expatriates from Russia, Ukraine, and Turkey."Participants include local crypto investors as well as foreigners, especially Russians, Ukrainians, and Turks. For them, this is the only way to make a living in Montenegro," Jolicic told BIRN. "They need to cover their living expenses in Montenegro, but banks are either unwilling or outright refuse to open accounts for them."Another crypto trader active in the Balkans declined a request from a journalist to exchange 70 euros for Bitcoin, stating that their transaction threshold was "no less than 10,000 euros per transaction."<h3>Russian-Language Telegram Groups Become Trading Hubs</h3>BIRN's investigation found that multiple Telegram channels and online forums operate crypto exchange services in the Balkans or specifically for Montenegro. These groups range from a few dozen to several thousand members, with content including exchange amounts, rates, fees, and specific transaction locations.A Russian-language Telegram group named "Обмен Валют Montenegro" (Montenegro Currency Exchange) has over 7,000 members and specializes in direct exchanges of cryptocurrencies for cash.<div><img style="max-width:100%;overflow:hidden;" src="https://d1x7dwosqaosdj.cloudfront.net/images/2025-12/1b6511e1780d4866818125f66d36dbd3.jpg" alt=""></div>The group advises users to "only conduct transactions in person in public places and take necessary precautions," but also allows transactions through verified traders—these traders must submit passport information for group verification to receive a certified badge.The group's logo and administrator usernames include the "Montelibero" community symbol. This community, located in Pecurice near the port city of Bar in Montenegro, was established by Russians in 2021. It claims to be a "free society" based on anarcho-capitalist principles and has issued its own cryptocurrency, EURMTL.Victor Korb, a member of the Montelibero community council, denied any association between the community and the Telegram group: "Questions about others using the Montelibero project identifier should be directed to the users themselves."Montenegro's tax authorities stated that, due to the lack of a legal basis, they are unable to tax such transactions."Until digital assets and their transactions are regulated by law, we cannot take any action," responded the Montenegrin Tax Authority. "Once the legal framework is established, the tax authorities will take all measures within their jurisdiction."Although the process is slow, there has been preliminary progress.In February 2025, the parliament passed an amendment to the "Anti-Money Laundering and Counter-Terrorist Financing Law," adding a "Register of Crypto-Asset Service Providers" and requiring "Know Your Customer" (KYC) verification for every crypto transaction exceeding 1,000 euros.The Montenegrin Capital Market Committee (an independent securities and capital market regulatory body) was required to establish the register by mid-December 2025."Individuals or entities providing cryptocurrency-to-cash exchange services through social media operate in an unregulated 'gray area,'" the committee stated. "If service providers are unregistered and do not comply with the law, their activities may be deemed illegal—especially if there is suspicion of money laundering, unauthorized provision of financial services, or evasion of regulatory measures."However, Jolicic remains skeptical. He believes that the registration requirements contradict the logic of the current gray market operations: "Those engaged in over-the-counter crypto trading must register and perform KYC verification for every client—but currently, no one is doing this. The law remains vague, and I believe these activities are inherently suspect under anti-money laundering regulations."<h3>Legislative Revisions Imminent</h3>BIRN previously exposed cases in Montenegro where cryptocurrencies were used to purchase real estate and vehicles, but such transactions were not incorporated into the tax or legal systems.Due to the lack of a legal framework, authorities cannot even accurately track crypto assets held by public officials.In mid-2023, the European Commission, the executive body of the EU, adopted the "Markets in Crypto-Assets Regulation" (MiCA), establishing a unified framework for digital asset regulation in the EU.In September 2025, Montenegrin Prime Minister Milojko Spajic announced plans to draft digital asset laws in line with EU standards, and the Ministry of Finance has initiated public consultations on the relevant draft.The proposed amendment to the "Credit Institutions Law" will, for the first time, define the concept of "digital assets," allowing credit institutions to provide crypto-related services (including digital token custody, trading platform operation, and transaction intermediation). The amendment to the "Tax Administration Law" will align Montenegrin law with the EU's "Directive on Automatic Exchange of Information on Crypto-Assets."The Ministry of Finance stated that this will enable Montenegrin tax authorities to automatically exchange digital asset information with EU member states and other countries. Crypto service providers will need to collect and maintain user data (including accounts, transactions, and crypto income) and submit formal reports to the national service provider register."Regarding the taxation of crypto assets, we emphasize that once the digital asset regulatory law takes effect, the Ministry of Finance will amend tax laws to clarify the tax treatment of digital assets," the ministry responded.</body></html>

"No Questions Asked, Cash Accepted": A Record of Cryptocurrency Street Trading in Montenegro

marsbit

Crypto cards are a temporary solution designed to bridge traditional payment systems with the cryptocurrency world, but they are ultimately doomed to fail. They rely on centralized banking infrastructure, depend on compliance with traditional financial regulations, and lack the privacy and decentralization that are core to crypto values. These cards function as an abstraction layer, adding extra fees and complexity while still being controlled by entities like Visa or Mastercard. They do not replace traditional payment systems but instead reinforce them.

Most crypto cards operate like liquidity bridges, converting crypto to fiat for spending, which incurs taxable events and additional costs. They also fail to provide true financial inclusivity, as users from restricted countries cannot access them, contradicting crypto’s ethos of equality.

While companies continue developing crypto cards to lock users into their ecosystems (e.g., MetaMask using Linea), these efforts are largely superficial, relying on third-party services like Rain for infrastructure. The only model that aligns with crypto principles is EtherFi, which allows users to spend against crypto collateral without selling assets, avoiding taxable events and embodying a true DeFi-TradFi hybrid. Ultimately, crypto cards are a flawed transitional product, not a long-term innovation.

<html><head></head><body>Editor's Note: Crypto cards were once seen as a bridge connecting the traditional payment system with the crypto world, but as the industry develops, the limitations of this model have become increasingly apparent: centralization, reliance on compliance, lack of privacy, additional fees, and even a departure from the core spirit of cryptocurrency.This article provides an in-depth analysis of the nature of crypto cards, pointing out that they are merely transitional solutions, not true innovations in decentralized payments. At the same time, the article presents EtherFi as one of the few models that aligns with crypto values, demonstrating the potential for DeFi and TradFi integration.Below is the original text:My overall view is that crypto cards are only a temporary solution to address two problems we all know well: first, bringing cryptocurrency to the masses; second, ensuring that cryptocurrency can be accepted as a payment method globally.Crypto cards are still cards after all. If someone truly identifies with the core values of cryptocurrency but believes that the future will be dominated by cards, then you might need to rethink your vision.<h1>All Crypto Card Companies Will Eventually Fail</h1> In the long run, crypto cards will likely die out, but traditional cards will not. Crypto cards just add a layer of abstraction; they are not pure cryptocurrency use cases. The card issuer is still a bank. Yes, they may have different logos, different designs, different user experiences, but as I said before, this is just abstraction. Abstraction makes things more convenient for users, but the underlying process hasn't changed.Different public chains and Rollups have been obsessed with comparing their TPS and infrastructure to Visa and Mastercard. This goal has existed for years: either "replace" or, more aggressively, "disrupt" Visa, Mastercard, AmEx, and other payment processors.But this goal cannot be achieved through crypto cards—they are not replacements; instead, they bring more value to Visa and Mastercard.These institutions are still the critical "gatekeepers." They have the power to set rules, define compliance standards, and even ban your card, company, or even bank if necessary. Why would an industry that has always pursued "permissionless" and "decentralized" ideals now hand everything over to payment processors?Your card is Visa, not Ethereum. Your card is a traditional bank, not MetaMask. You are spending fiat, not cryptocurrency.Your favorite crypto card companies have done almost nothing except put their logo on the card. They are just riding the narrative and will disappear in a few years, and those digital cards issued until 2030 won't actually function by then.I'll explain later how easy it is to make a crypto card now—in the future, you might even make one yourself!<h2>The Same Problems + More Fees</h2>The best analogy I can think of is "Application-Specific Sequencing." Yes, it's cool that applications can process transactions themselves and profit from it, but it's only temporary: infrastructure costs are falling, communication is maturing, and the economic issues exist at a higher level, not a lower one. (If you're interested, check out @mvyletel_jr's great talk on ASS.)The same goes for crypto cards. Yes, you can top up with cryptocurrency, and the card will convert it to fiat for payment, but the problems of centralization and permissioned access remain.It does help in the short term: merchants don't need to adopt new payment methods, and crypto spending is almost "invisible." But this is just a transitional step toward what most crypto believers truly want: Demand: Pay directly with stablecoins, Solana, Ethereum, Zcash No need: The indirect path of USDT → Crypto Card → Bank → FiatAdding a layer of abstraction adds a layer of fees: spread fees, withdrawal fees, transfer fees, and sometimes even custody earnings. These fees may seem insignificant, but they compound: a penny saved is a penny earned.<h1>Using a Crypto Card Doesn't Mean You Are "Unbanked" or "Debanked"</h1>Another misconception I've observed is that people think using a crypto card means they are unbanked or debanked. Of course, this isn't true. Under the label of a crypto card, there is still a bank, and the bank must report some of your information to the local government. Not all data, but at least some key data.If you are an EU citizen or resident, the government will know your bank account earnings, large suspicious transactions, certain investment income, account balances, etc. If the underlying bank is in the US, they know even more.From a crypto perspective, this has both pros and cons. The pro is transparency and verifiability, but the same rules apply when you use a standard debit or credit card from your local bank. The con is that it is not anonymous or pseudonymous: the bank still sees your name, not an EVM or SVM address, and you still need to do KYC.<h2>Limitations Still Exist</h2>You might say that crypto cards are great because they are really easy to set up: download the app, complete KYC, wait 1–2 minutes for verification, top up with cryptocurrency, and then you're ready to use it. Yes, this is indeed a killer feature, extremely convenient, but not everyone can use it.Russia, Ukraine, Syria, Iraq, Iran, Myanmar, Lebanon, Afghanistan, and half of Africa—citizens of these countries cannot use cryptocurrency for daily spending without residency in another country.But hey, it's only 10–20 countries that don't qualify, what about the other 150+ countries? The issue is not whether the majority can use it, but the core value of crypto: a decentralized network with equal nodes, financial equality, and equal rights for all. This does not exist in crypto cards because they are not "crypto" at all.Max Karpis perfectly explains here why "neo-banks" are doomed to fail from the start.<div><img style="max-width:100%;overflow:hidden;" src="https://d1x7dwosqaosdj.cloudfront.net/images/2025-12/7cd0bc0b49c5433e9d7b0dca037dc107.png" alt=""></div>For reference, a real scenario where I used cryptocurrency for payment was when booking a flight on Trip.com. They recently added an option to pay with stablecoins, directly from your wallet, and of course, it's available to anyone in the world.<div><img style="max-width:100%;overflow:hidden;" src="https://d1x7dwosqaosdj.cloudfront.net/images/2025-12/08084d00620a4f78a374940dc0cafd05.png" alt=""></div>This is the real cryptocurrency use case and a true crypto payment. I believe the final form will be like this: wallets will be specifically optimized for the user experience of payments and spending, or (less likely) wallets will evolve into crypto cards, if crypto payments are somehow widely adopted.<h1>Crypto Cards Function Similarly to Liquidity Bridges (Rain)</h1> I have an interesting observation: self-custody crypto cards operate very similarly to cross-chain bridges. This only applies to self-custody cards: cards issued by centralized exchanges (CEX) are not self-custody, so exchanges like Coinbase have no obligation to make users think the funds are under their control. A legitimate use case for CEX cards is that they can serve as proof of funds for government, visa applications, or similar scenarios. When you use a crypto card tied to your CEX balance, you are still within the same ecosystem.Self-custody crypto cards are different: they operate like liquidity bridges, where you lock funds (cryptocurrency) on chain A (crypto balance), and then unlock funds (fiat) on chain B (the real world).This "bridge" in the crypto card space is like the shovel during the California Gold Rush: it is the key secure channel connecting crypto-native users and businesses that want to issue their own cards.@stablewatchHQ's analysis of this bridge is spot-on, considering it essentially a Card-as-a-Service (CaaS) model. This is the most overlooked aspect by everyone discussing crypto cards. These CaaS platforms provide the infrastructure for businesses to launch their own branded cards.<div><img style="max-width:100%;overflow:hidden;" src="https://d1x7dwosqaosdj.cloudfront.net/images/2025-12/02f94e6328c04dcca7a23aac13105c34.png" alt=""></div><h2></h2><h2>Rain: How Crypto Cards Are Born</h2>About half of your favorite crypto cards are probably powered by @raincards, and you may never have heard of it. Rain is one of the most fundamental protocols in the neo-banking system because it handles almost all the core components behind crypto cards. All that's left for the remaining companies to do is slap their logo on it (sounds harsh, but it's close to the truth).<div><img style="max-width:100%;overflow:hidden;" src="https://d1x7dwosqaosdj.cloudfront.net/images/2025-12/55dcb8535afc4a7f946190a9c327b94e.png" alt=""></div>Rain enables companies to quickly launch their own crypto cards, and frankly, Rain's execution capabilities could even allow it to exist long-term outside the crypto space. So, stop fantasizing that teams need to raise tens of millions of dollars to issue a crypto card—they don't need that capital; they just need Rain.The reason I emphasize Rain so much is that people generally overestimate the effort required to issue a crypto card. Maybe I'll write a separate article about Rain in the future because it is truly a severely underestimated technology.<h1>Crypto Cards Have No Privacy or Anonymity</h1>The lack of privacy or anonymity in crypto cards is not a problem with the cards themselves, but rather an issue deliberately ignored by those promoting them, hiding behind so-called "crypto values." Privacy is not a widely used feature in the crypto space; pseudoprivacy (pseudonymity) does exist because we see addresses, not names. However, if you are ZachXBT, Wintermute's Igor Igamberdiev, Paradigm's Storm, or someone else with strong on-chain analysis capabilities, you can significantly narrow down the real identity corresponding to an address.Of course, crypto cards don't even have the pseudonymity of traditional cryptocurrencies because you must complete KYC to activate a crypto card (actually, you're not activating a crypto card; you're opening a bank account).If you are in the EU, the company providing the crypto card will still send some of your data to the government for tax purposes or other reasons the government needs to know. Now, you've given regulators a new opportunity to track you: linking your crypto address to your real identity.<h2>Personal Data: The Currency of the Future</h2>Cash still exists (the only form of anonymity, except the seller seeing you) and will exist for a long time. But eventually, everything will be digitized. The current digital system does not offer any benefits to consumers in terms of privacy: the more you spend, the higher the fees you pay, and in exchange, they know more about you. What a "great deal"! Privacy is a luxury, and in the crypto card space, it will remain so. An interesting idea is that if we achieve truly good privacy, even to the point where businesses and institutions are willing to pay for it (not like Facebook, but with our consent), it could become the currency of the future, or even the only currency in a jobless, AI-driven world.<h1>If Everything Is Doomed to Fail, Why Are Tempo, Arc Plasma, Stable Still Being Built?</h1>The answer is simple—to lock users into the ecosystem. Most non-custodial cards choose L2s (e.g., MetaMask uses @LineaBuild) or independent L1s (e.g., Plasma Card uses @Plasma). Due to high costs and finality issues, Ethereum or Bitcoin are generally not suitable for such operations. Some cards use Solana, but this is still a minority. Of course, companies choose different blockchains not only for infrastructure but also for economic benefits. MetaMask uses Linea not because Linea is the fastest or most secure, but because both Linea and MetaMask belong to the ConsenSys ecosystem. I specifically use MetaMask as an example because it uses Linea. Everyone knows that almost no one uses Linea; it is far behind Base or Arbitrum in the L2 competition.But ConsenSys made a smart decision to put Linea underneath their card because it locks users into the ecosystem. Users get accustomed to a good user experience through something they use daily. Linea naturally attracts liquidity, trading volume, and other metrics, rather than relying on liquidity mining campaigns or begging users to bridge.This strategy is similar to what Apple did when it launched the iPhone in 2007, keeping users on iOS until they become so habituated they can't switch to another ecosystem. Never underestimate the power of habit.<h2>EtherFi Is the Only Viable Crypto Card</h2>After all this thinking, I've concluded that: @ether_fi is probably the only crypto card that truly aligns with the crypto spirit (this research is not sponsored by EtherFi, and even if it were, I wouldn't mind).In most crypto cards, the cryptocurrency you top up is sold, and then your balance is replenished with cash (similar to the liquidity bridge I described earlier).<div><img style="max-width:100%;overflow:hidden;" src="https://d1x7dwosqaosdj.cloudfront.net/images/2025-12/80e68073544b4ba28b974606dff98a6f.png" alt=""></div> EtherFi is different: the system never sells your cryptocurrency; instead, it gives you a cash loan and uses your crypto assets to earn yield.EtherFi's model is similar to Aave. Most DeFi users dream of seamlessly taking out cash loans collateralized by their crypto assets, and this capability has emerged. You might ask: "Isn't this the same? I can top up with crypto and spend with a crypto card like a normal debit card; is this extra step necessary?"<div><img style="max-width:100%;overflow:hidden;" src="https://d1x7dwosqaosdj.cloudfront.net/images/2025-12/7a0aa9ad6d614695bbc6898dc956e9e5.png" alt=""></div>The problem is that selling your cryptocurrency is a taxable event, sometimes even more taxable than daily spending. And in most cards, every operation you do might be taxed, leading to you paying more taxes (again, using a crypto card does not mean being debanked). EtherFi solves this problem to some extent because you are not actually selling cryptocurrency; you are just using it as collateral for a loan.For this reason alone (plus no foreign exchange fees on USD, cashback, and other benefits), EtherFi becomes the best example of the convergence of DeFi and TradFi.Most cards try to pretend they are crypto products but are actually just liquidity bridges, while EtherFi is truly for crypto users, not just for bringing cryptocurrency to the masses: it allows crypto users to spend locally until the masses realize how cool this model is. Among all crypto cards, EtherFi might be the only one that can survive long-term.I think crypto cards are an experimental field, but unfortunately, most teams you see are just riding the narrative without giving due recognition to the underlying systems and developers.Let's see where progress and innovation take us. Currently, we are seeing the globalization of crypto cards (horizontal growth), but there is a lack of vertical growth, which is precisely what this payment technology needs in its early stages.</body></html>

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