Author: Patrick, Artemis
Compiled by: Felix, PANews
Crypto cards, which allow users to spend stablecoins and cryptocurrencies at traditional merchants, are one of the fastest-growing segments in the digital payments space. Their transaction volume grew from about $100 million per month at the beginning of 2023 to over $1.5 billion by the end of 2025, with a compound annual growth rate (CAGR) of 106%. On an annualized basis, the market size is now over $18 billion, comparable to peer-to-peer (P2P) stablecoin transfers ($19 billion), which grew only 5% over the same period.
Infrastructure. The crypto card business consists of three layers: payment networks (Visa, Mastercard), card program managers and issuers, and consumer-facing end products. Although Visa and Mastercard have nearly the same number of card programs (both over 130), Visa dominates with over 90% of the on-chain card transaction volume, thanks to early partnerships with infrastructure providers. The most significant structural development is the emergence of full-stack issuers—companies like Rain and Reap that hold membership directly, combining program management with issuance, bypassing dependencies on traditional issuing banks, and thus capturing more value per transaction.
Geography. The opportunity for stablecoin cards is concentrated where stablecoins solve real problems. India ($338 billion in cryptocurrency inflows) and Argentina (46.6% USDC usage) are global outliers. The opportunity in India lies in crypto-backed credit cards (the Unified Payments Interface (UPI) has commoditized debit cards); the opportunity in Argentina lies in stablecoin debit cards for hedging against inflation (currently, there are no competing digital payment methods). For developed markets, the opportunity is not about solving unmet needs but about attracting a differentiated, high-value user segment that traditional products fail to serve optimally.
Outlook. Direct merchant acceptance of stablecoins faces an insurmountable cold start problem: no captive user base, no exclusive inventory, and for the average Western consumer or merchant, no better solution than credit cards. All successful payment networks in recent years started with exclusivity or a mandatory function—stablecoin payments have neither. The real opportunity lies not at the point of sale but in the back-end settlement. Stablecoin-backed bank cards represent a fusion of both: bank cards provide universal acceptance; stablecoins provide cross-border value storage. Developers who recognize this will focus on the integration layer rather than fighting behavioral economics with technology.
Crypto cards are the infrastructure for the next phase of stablecoin adoption: stablecoins store value anywhere, anytime; bank cards spend anywhere.
I. What Are Crypto Cards?
Stablecoin payments have entered a new growth phase. Monthly transaction volume grew from $1.9 billion in January 2023 to $10.2 billion in August 2025, driven by sustained demand for stablecoin payments in emerging markets, improved UI/UX, and increasing institutional acceptance of stablecoin payment channels.
Since January 2023, crypto card transaction volume has compounded at an annual rate of 106%, reaching an annualized volume of $18 billion, while P2P stablecoin transfers grew only 5% over the same period, with an annualized volume of $19 billion. Crypto card volume has grown from a small fraction of retail volume to be on par with P2P volume.
1.1 What Are Crypto Cards?
A crypto card is a payment card—prepaid, debit, or credit—that enables users to spend cryptocurrencies or stablecoins at traditional merchants through existing card network infrastructure. When a user holds stablecoins in a wallet or Bitcoin on an exchange and wants to buy coffee, pay rent, or shop online, a crypto card connects these digital assets to the global network of merchants that accept Visa and Mastercard.
1.2 Transaction Flow Mechanics
When a user swipes a crypto card at a merchant terminal, what ultimately happens to the funds? The answer depends on the card's underlying infrastructure. There are currently three settlement flows in the market, each with different technical architectures, counterparty relationships, and implications for the broader payments ecosystem.
The vast majority of crypto card transactions today are settled in fiat. This remains the default option because it requires no merchant integration. The conversion from crypto to fiat happens before settlement to the payment network, so by the time the transaction reaches the network, it is indistinguishable from any other card payment. Notably, typical program managers like Baanx's Crypto Life and Bridge are not responsible for settling to their designated payment networks; they partner with issuing banks like Lead Bank and Cross River Bank, respectively, which handle settlement. Full-stack issuing platforms like Rain settle by clearing stablecoin or crypto assets to the Visa network, which then routes the funds to the acquiring bank in the required fiat currency. For the vast majority of crypto card usage, from the merchant's perspective, nothing changes.
Stablecoin settlement is growing rapidly but is still in its early stages. Visa's stablecoin-related card spend reached an annualized run rate of $3.5 billion in Q4 FY2025, growing approximately 460% year-over-year, but still only accounts for about 19% of total crypto card settlement volume.
1.3 Infrastructure Stack: A Three-Layer Architecture
The infrastructure stack for crypto cards can be divided into three core layers, each dependent on the others.
Layer 1: Payment Networks
According to the Nilson Report, as of 2024, Visa and Mastercard control over 70% of the card network payment infrastructure market share. In the crypto card industry, their current market share is likely close to 100%, with few exceptions like the American Express-issued Coinbase One card.
Despite having a similar number of payment programs, Visa's share of on-chain transaction volume far exceeds its rival's. This discrepancy reflects their different market strategies.
Visa's strategy has revolved around partnering early with emerging program managers (e.g., Rain, Reap, and other infrastructure providers) to capture opportunities as new crypto-native issuers enter the market. These partnerships allow Visa to access dozens of downstream card products through a single integration, enabling rapid scaling as new programs emerge.
In contrast, Mastercard has historically focused on direct partnerships with CEXs. Revolut, Bybit, and Gemini all operate Mastercard-branded card programs. This strategy ties Mastercard's crypto card volume more closely to the user bases and trading activity cycles of exchanges.
Importantly, their strategies are not mutually exclusive, and the networks often compete for share within the same issuer's customer base.
- Bybit's global debit and prepaid cards use Mastercard, but its credit card product in the Asia-Pacific region partners with Visa.
- Mastercard is also the primary network provider for Baanx's Crypto Life, a white-label program manager supporting products like the MetaMask Card and Ledger Card.
Visa's dominance suggests that controlling the infrastructure layer may be more efficient than pursuing exchange partnerships one by one.
Layer 2: Issuing Infrastructure
Specialized platforms provide the technical and regulatory infrastructure for card programs. These platforms can be divided into two broad categories: program management platforms and full-stack issuing platforms.
Program management platforms typically partner with issuing banks that hold primary membership with Visa or Mastercard. They manage BIN sponsorship relationships, handle compliance requirements, and operate the settlement systems from the created user bank accounts to the desired payment network. The various program managers are responsible for converting the crypto assets or stablecoins held in the user's linked digital wallet into fiat currency, making it compatible with the issuing bank's settlement infrastructure. Program management platforms offer white-label capabilities, enabling other companies to launch their own branded card products. Examples of these white-label card program managers include Baanx, Bridge, and Gnosis Pay.
In contrast, full-stack issuing platforms like Rain and Reap consolidate many of these services into a single offering. These "Cards-as-a-Service" platforms exemplify how infrastructure providers are preparing for a stablecoin-native future.
As principal members of Visa, Rain and Reap can issue cards directly on the Visa network without intermediaries. Rain uniquely integrates the existing issuance process—primarily providing BIN sponsorship, acting as the lender of record, and settling directly to the Visa network—into a unified product, thereby capturing a significant portion of value that typically leaks to banks and other intermediaries.
The broader implication for white-label program managers is this: as stablecoin settlement scales and regulatory frameworks mature, infrastructure providers with primary membership and native settlement capabilities will become key channels for the next generation of issuance. Program managers, operating a capital-light model, can scale with the ecosystem's growth, capturing volume across dozens of downstream products without high customer acquisition costs. However, full-stack issuing platforms are likely to retain their largest clients and continue eroding incumbents' market share.
Layer 3: Consumer-Facing Products
The consumer layer encompasses the card products that users actually interact with—the apps they download, the cards in their wallets, and the brands associated with spending crypto. This layer can be subdivided into four distinct categories, each with different strategic motivations, user bases, and business models.
Category 1: CEX Cards
- Coinbase Card, Crypto.com Card, Bybit Card, Binance Card, Gemini Card, Kraken Card
- Integrated with exchange wallets; typically prepaid or debit cards; if credit cards, they function like regular credit cards, paying from a bank account or linked exchange positions and offering cashback in cryptocurrency.
Category 2: Self-Custody/Protocol-Native Cards
- Ether.fi Cash, MetaMask Card, Phantom Card
- Users hold assets until the moment of spending
- Often integrate DeFi yield or collateralized borrowing
Category 3: Crypto-Native Neobanks
- KAST (Solana-based), Offramp (Tron-based), Xapo Bank (BTC-based)
- Full banking experience built around cryptocurrency
- Target crypto-native users seeking a primary banking relationship
Category 4: Traditional Fintech Neobanks
- Revolut (EU, India, etc.), Chime (US), N26 (EU)
- Add crypto functionality to existing fintech platforms
II. The Flow of Funds
2.1 Who Drives the Flow of Funds?
The incentives driving the adoption of crypto payment cards vary across the ecosystem but can generally be summarized into three strategies.
1 Exchanges and DeFi Protocols: Cards as a User Acquisition Channel and Profit Layer
For CEXs and DeFi protocols, issuing cards is essentially a distribution strategy. Cards act as an incentive mechanism to onboard users into the broader platform, allowing companies to convert everyday spending behavior into platform engagement and, ultimately, profitable balances.
In this model, reward programs effectively become customer acquisition cost (CAC) tools. Platforms subsidize cardholders through cashback programs and offset this expense through subsequent user deposits and the profitability of balance sheet float. The level of subsidy varies by business model.
CEXs that pay rewards in fiat or highly liquid cryptocurrencies (e.g., Gemini, Coinbase, Kraken) incur real dollar costs that must be covered by trading fees, interest income, and asset yield. After acquiring Blockrize in January 2021, Gemini launched a credit card program with crypto cashback rewards in 2022. Despite the Gemini credit card business continuing to operate at a loss (see net credit card revenue shown in purple in the chart below), Gemini continues to invest in and operate its credit card product due to its strong performance in user acquisition and retention.
Notably, outside of CEXs, various reward program designs are available to attract users. Platforms offering token incentives (e.g., Ether.fi paying rewards in $SCR, neobanks rewarding users with native tokens, etc.) have near-zero marginal cost for rewards, enabling them to offer higher cashback percentages without significant capital expenditure. Ether.fi Cash offers an average cashback rate of about 4.08%, higher than the "up to 4% cashback" offered by many CEXs.
Ether.fi Cash users who enable "Borrow Mode" deposit ETH as collateral into Ether.fi's staking or liquidity vault products, boosting the protocol's TVL and increasing fee revenue. Although Ether.fi's TVL has fluctuated with the overall market this year, its structural flywheel remains: bank cards drive deposits, deposits drive TVL, TVL drives fee revenue.
2 Crypto-Native Wallets: Increasing Average Revenue Per User (ARPU) by Issuing Payment Cards
Unlike exchanges and DeFi protocols, which primarily use payment cards as acquisition tools, the fundamental reason native crypto wallets and fintech platforms issue payment cards is distinctly different. Their motivations differ significantly due to inherent differences in their business models.
Self-custody wallets like MetaMask and Phantom have large global user bases but cannot capture custody yield. They cannot earn interest on deposits, rehypothecate customer assets, or participate in staking yield without explicit user consent. Consequently, their revenue streams are concentrated in highly cyclical activities—primarily transaction fees, bridging revenue, and partner integration income.
For wallets, payment cards offer an attractive monetization model. Transaction fees and subscription fees provide diversified revenue streams, while card usage deepens user engagement and reduces churn. Cards enable wallets to transform sporadic crypto activity into habitual spending behavior, increasing Average Revenue Per User (ARPU) and improving user retention. By partnering with program managers to issue cards, wallets can deploy cards with minimal regulatory burden while profiting from users' on-chain and off-chain activities.
Beyond revenue directly related to card usage, some of the world's largest wallet providers have begun issuing their own stablecoins. In Q3 2025, MetaMask and Phantom launched native stablecoins $mUSD and $CASH, respectively, specifically to fund their respective debit card products. Instead of relying on users holding USDC or USDT, these wallets built closed ecosystems where users convert assets into the wallet's native stablecoin for spending.
Early data shows starkly different trajectories. Phantom's $CASH supply grew steadily from about $25 million in September to about $100 million by the end of December, indicating sustained user adoption and retention. In contrast, MetaMask's mUSD neared $100 million in early October before falling back to about $25 million, a drop of up to 75%.
Launching a native stablecoin offers wallet providers several benefits:
- Vertical Integration: Controlling the stablecoin layer captures additional profit that would otherwise flow to Circle (USDC) or Tether (USDT).
- Ecosystem Lock-in: Users holding mUSD or CASH are less likely to switch wallets. The stablecoin becomes a retention mechanism, further increasing ARPU.
The differing trajectories of mUSD and CASH highlight a strategic question related to card issuance: When should a wallet launch a native stablecoin to support its card product, and when should it allow users to fund cards with existing stablecoins?
For card products, integration should be the default. Cards funded with USDC work well: users are likely to hold USDC, liquidity is ample, and settlement infrastructure already supports USDC.
Adding a proprietary stablecoin layer introduces friction, artificially satisfying a non-existent need. For wallet providers, a stablecoin might solve a banking problem, but it shouldn't exist as a standalone profit layer.
3 Emerging Markets and "Last Mile" Access Providers
In Latin America, Europe, the Middle East, Africa, and Southeast Asia, a unique class of fintech companies views crypto-linked cards as infrastructure for accessing digital dollars. These companies target populations facing significant financial friction: hyperinflating local currencies, capital controls, unreliable banking infrastructure, and high cross-border payment costs. Companies like Redotpay, Kast, and Holyheld are all working to provide crypto cards for these users.
In these cases, stablecoin-linked cards meet a structural market need. They enable users to hold savings in a dollar-pegged asset, circumvent local FX restrictions, and access global merchants without interacting with unstable domestic banking systems. For many consumers, a crypto-linked card is a viable path to financial stability.
The economic models of these issuers also differ. Instead of relying on transaction revenue or custody yield, they profit through:
- FX spreads
- Crypto-to-fiat conversion fees
- Merchant and cross-border transaction fees
- Exchange income
Their strategy is to provide "last mile" financial services. In doing so, they capture a significant portion of the value created by the informal dollarization process in these regions through card-specific fees.
2.2 Where Do the Funds Flow?
As more merchants begin to accept native stablecoin payments, understanding where stablecoin-denominated commerce actually occurs and which tokens dominate these payment flows becomes crucial. Native stablecoin settlement—where the card network settles directly in stablecoins rather than fiat currency—offers advantages in speed, availability, and counterparty risk. Visa's and Mastercard's native stablecoin settlement networks support only a handful of regulated stablecoins: USDC, USDG, PYUSD, and EURC; Mastercard also supports FIUSD. Notably absent is USDT, the world's largest stablecoin by market cap and volume, whose regulatory uncertainty prevents its inclusion in mainstream native settlement networks.
But the mix of stablecoins is far less important than it seems. Today, the vast majority of crypto card transactions ultimately settle in fiat, regardless of the cryptocurrency or stablecoin the user holds. The user's stablecoin is converted to local fiat at the time of transaction; the merchant sees only local currency. USDT's exclusion from native settlement systems does not mean markets with high USDT usage cannot use crypto cards.
USDT dominates stablecoin trading volume in almost all markets. However, two countries stand out as global exceptions: India (47.4% USDC) and Argentina (46.6% USDC), where USDC usage is nearly on par with USDT. Both countries represent significant potential markets for crypto cards, but their natures are截然不同 (distinctly different).
In the 12 months leading up to June 2025, India became the largest crypto market in the Asia-Pacific region with $338 billion in inflows, a 48-fold increase over five years. However, this massive volume exists almost entirely outside the formal financial system, creating the world's largest "unbanked" gap—the vast chasm between actual crypto activity and regulated, compliant channels.
India's 2022 Income Tax Act amendments imposed a flat 30% tax on income from cryptocurrency use for individuals and businesses, along with a 1% tax deducted at source (TDS) on all transfers. As a result, much of India's crypto activity moved offshore. The Indian Ministry of Finance reported that crypto exchanges withheld only $5.67 million in taxes in FY 2024-2025, with crypto transfer volume through registered Virtual Digital Asset providers amounting to only about $567 million. This indicates enormous latent demand for compliant crypto products, where the limiting factor is regulation, not user interest.
However, to understand the crypto card opportunity in India, it must be viewed in the context of the country's Unified Payments Interface (UPI). Since its launch in 2016, UPI has revolutionized India's digital payments landscape.
According to the Reserve Bank of India's "Payment Systems Report 2025," UPI's share of digital transaction volume grew from 19% in 2018 to 83% in 2024. The system offers features highly aligned with the value proposition of crypto cards, such as instant fund transfer, 24/7 availability, and virtual payment addresses. Consequently, many crypto card issuers have begun integrating with UPI to reach potential customers.
With stringent regulatory scrutiny pushing the vast majority of Indian crypto trading offshore, India, as the country with the fastest-growing crypto adoption rate in Asia, stands to gain significant value from stablecoin-native issuing platforms.
Is the US Ready for Change?
In mature economies, both credit card users and credit card companies continue to grow. Users desire unsecured credit for cashback, points rewards, and numerous value-added services. For issuers, credit card-related fees are significantly higher than those for debit cards or other payment methods, especially in developed regions like the US and EU, where transaction fees for debit and prepaid cards are subject to strict regulatory caps.
With recent entries into the credit card market by companies like Robinhood, Revolut, and Coinbase, and continued customer base expansion by traditional financial institutions like American Express, JPMorgan Chase, and Capital One, credit card revenue has grown significantly in developed countries over the past decade.
Stablecoin adoption is no longer confined to early crypto enthusiasts. Total stablecoin supply exceeds $308 billion; monthly active addresses for stablecoins continue to grow, hitting an all-time high in December 2025; demographic data shows crypto adoption is occurring among groups in their prime earning and spending years.
Relative to the total number of credit card users, the population holding stablecoins remains small, but it is growing faster than the traditional user base and holds expectations for integrated, yield-bearing, natively digital financial products.
A new user segment is emerging in this market: consumers holding significant stablecoins and digital assets who increasingly expect seamless usability of these assets. If issuers remain on the sidelines, they risk ceding this segment to crypto-native competitors who are already building distribution channels and user relationships.
Although unsecured credit has yet to emerge significantly in the crypto and stablecoin credit card space, existing credit products, like the Coinbase One Card and Gemini Credit Card, offer alternatives for payment and rewards denominated in cryptocurrency or stablecoins through familiar credit card product lines.
On-chain solutions like Ether.fi Cash Borrow Mode, Nexo Credit Line, and Redotpay Credit provide credit to financially sophisticated users who may:
- Be highly active on-chain but lack traditional credit history, potentially struggling to access credit products regardless of actual financial capacity;
- Seek on-chain alternatives to traditional credit card products to maximize the utility of their on-chain capital.
The signals from stablecoin credit cards suggest the traditional credit card economic model won't be immediately disrupted. The US credit card market is vast, growing, and possesses structural advantages due to its transaction dynamics and consumer credit demand.
However, signs indicate that the stablecoin-holding user base constitutes a differentiated segment whose characteristics warrant attention from traditional issuers:
- Higher financial engagement and literacy
- Greater willingness to adopt new financial products
- Growing digital assets available for credit card spending
- Behavioral data (on-chain activity) enabling new underwriting and segmentation approaches
The first movers in this space are crypto-native platforms: Coinbase, Gemini, MetaMask, Phantom, and Ether.fi. Traditional issuers have advantages in scale, brand trust, regulatory relationships, and credit underwriting infrastructure. Opportunity remains for incumbents that combine these strengths with stablecoin-native functionality.
III. The Future
As stablecoin adoption accelerates, payment innovation is shifting from card-mediated digital commerce to stablecoin-led payment channels. Global payment networks, including Visa, Mastercard, PayPal, and Stripe, are building infrastructure to enable merchants to accept digital dollars natively, with lower fees and faster settlement. These developments raise a strategically important question:
If merchants can accept stablecoins natively, will crypto cards still be necessary?
This question reflects a broader structural tension: the transition from a card-centric payment network based on issuer-acquirer economic relationships and transaction fee revenue towards an asset-centric system that achieves settlement finality, programmability, and low-cost value transfer at the blockchain layer.
Although the direction of innovation is clear, the timing and feasibility of a full transition to native stablecoin acceptance remain uncertain. Three structural realities suggest that crypto cards will remain strategically relevant for the foreseeable future and likely grow faster than the crypto economy itself.
Network Effects Are Extremely Difficult to Replicate
Card networks and issuers operate at over 150 million merchant locations globally, spanning e-commerce, physical retail, hospitality, transportation, and SMBs. Building this infrastructure required decades of coordinated investment: POS hardware deployment, merchant agreements, bank relationships, regulatory approvals, and consumer trust building.
Merchant coverage for native stablecoin payment methods is nearly zero. Achieving significant penetration would require:
- Integration of new POS systems into hardware and software systems
- Establishment of merchant training, onboarding, and support infrastructure
- Improvements to accounting, reconciliation, and treasury operations
- Compliance measures to maintain AML/KYC integrity across jurisdictions
This is a multi-year, potentially decade-long, transition period. Until then, crypto cards are the most convenient bridge connecting digital asset holders to merchant acceptance.
Furthermore, card networks and issuers provide services far beyond transaction routing. They also offer a range of services consumers and merchants take for granted:
- Fraud Protection: Advanced detection models and liability frameworks
- Dispute Resolution: Chargeback rights protect consumers from merchant defaults or fraud.
- Unsecured Consumer Credit: Allows consumers to spend against future income and repay over time
- Reward Programs: Cashback, points, and miles funded by interchange fees
- Purchase Protections: Extended warranties, price protection, travel insurance
Stablecoin payments are designed to be lean, offering a very limited set of services. Stablecoin issuers can blacklist hacker addresses, and customers can negotiate refunds with issuers, but options remain limited. To match the functionality of bank cards, a direct acceptance system would have to rebuild these services from scratch, at great cost and complexity.
Credit, in particular, represents a strong moat. Global consumers still prefer credit instruments for cash flow management and points accumulation. Payment methods that cannot offer credit face structural headwinds in consumer adoption. Even if new technologies offer cost advantages, merchant adoption lags due to operational constraints:
- POS systems and e-commerce platforms optimized for card payments
- Reliance on established acquirer relationships and support infrastructure
- Tax filing and accounting systems designed for card settlement
But in some areas, the situation differs. For businesses with high volume and low margins (e.g., remittances, B2B invoicing, cross-border e-commerce), the economics of stablecoins might justify the integration investment. For most merchants, however, bank cards remain the most convenient option.
Native stablecoin P2P and B2B payments will continue to expand in cross-border e-commerce, digital services, and markets underserved by traditional banking. However, the near-term potential for direct stablecoin acceptance to fully replace card networks is low. Bank cards still offer unique advantages for consumers and merchants, such as:
- Everyday spending (retail, dining, subscriptions, travel)
- Use cases requiring credit lines, rewards, or fraud protection
- Merchants unwilling to integrate new payment infrastructure
- Regions where stablecoin regulation is unclear or restrictive
Meanwhile, stablecoin-based P2P payments also have their own distinct advantages, with little overlap with bank cards in these areas, including but not limited to:
- High-value B2B payments and invoicing
- Cross-border trade where transaction and FX fees are significant
- Native crypto merchants and digitally savvy consumers
- Markets where card infrastructure never gained traction
- High-frequency, low-margin transactions where 2-3% fees erode profits
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