A splash of cold water: crypto cards might not have a future
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A splash of cold water: crypto cards might not have a future
Most teams simply leverage narrative hype without giving proper recognition to the underlying systems and actual developers.
Navigating Web3 tides with focused insightsAuthor: Pavel Paramonov
Compiled by: TechFlow
Crypto Cards Have No Future: Why They're Just a Stopgap?
My overall view is that crypto cards exist only as a temporary solution to solve two well-known problems: bringing cryptocurrency into the mainstream and ensuring its global acceptance as a payment method.
However, crypto cards are still just cards. If someone truly believes in the core values of cryptocurrency but still envisions a future dominated by cards, they may need to rethink their vision.
All Crypto Card Companies Will Eventually Die
In the long run, crypto card companies are likely to disappear—but traditional bank cards won't. Crypto cards essentially add an abstraction layer: they aren't genuine cryptocurrency use cases. The issuer behind these cards remains a bank. While these cards might have different logos, designs, or user experiences (UX), at their core, they’re merely abstracted extensions. Abstraction does improve user convenience, but the underlying processes remain unchanged.
Currently, various Layer 1 blockchains (L1s) and Rollup solutions are eager to compare their transactions per second (TPS) and infrastructure with Visa and Mastercard. For years, their goal has been to “replace” or even more aggressively, “overthrow,” Visa, Mastercard, American Express (AmEx), and other payment processors.
But this goal cannot be achieved through crypto cards—they don’t replace existing payment networks; instead, they add more value to Visa and Mastercard.
Traditional payment networks like Visa and Mastercard remain key “gatekeepers,” holding the power to set rules and define compliance standards.
More importantly, they retain the right to block your card, ban your company, or even suspend the bank you partner with.
Therefore, crypto cards aren’t the ultimate solution for the future of payment revolution—they’re more like transitional tools, eventually to be replaced by purer, more decentralized technologies.
Why does an industry that constantly champions “permissionlessness” and “decentralization” willingly hand everything over to payment processors?
Your card is Visa, not Ethereum;
Your card is tied to traditional banks, not MetaMask;
You're still spending fiat, not cryptocurrency.
In reality, most of your favorite “crypto card” companies do almost nothing beyond printing their logo on the card. They ride the narrative wave and will likely vanish in a few years. Even digital cards issued today may no longer function by 2030.
Making Crypto Cards Is Getting Easier
Today, creating your own crypto card is extremely easy—and in the future, you might even make one yourself!
Same Problems + More Fees
The closest analogy I can think of is "app-specific sequencing" (ASS). Yes, the idea of apps independently processing transactions and profiting from them sounds cool, but it’s a temporary phenomenon: infrastructure costs are falling, communication tech is maturing, and economic issues reside at higher levels, not lower ones.
Crypto cards are no different: yes, you can deposit crypto and have the card convert it to fiat for payments, but centralization and permissioned access issues remain.
Undeniably, crypto cards are useful in the short term: retailers don’t need to adopt new payment methods, and crypto spending becomes “invisible.” However, this is just a transitional phase toward what crypto believers truly want:
Goal: Pay directly with stablecoins, Solana, Ethereum, Zcash, etc. No need: Indirect payment via USDT → crypto card → bank → fiat.
Each additional layer means extra fees: exchange spreads, withdrawal fees, transfer fees, even revenue sharing from custody. These may seem trivial, but they accumulate over time—“a penny saved is a penny earned.”
Crypto cards may be a short-term fix, but in the long run, they aren't the ultimate answer for decentralized payments.
Using a Crypto Card Doesn't Make You “Unbanked” or “Bankless”
There's a popular belief that people using crypto cards are “unbanked” or “bankless.” But that’s not true. Banks still exist behind crypto cards, and those banks must report certain user information to their respective governments. Not all data, but at least some.
If you're an EU citizen or resident, the government knows your bank account interest income, large suspicious transactions, certain investment earnings, account balances, etc. If the underlying bank is American, they know even more.
From a cryptocurrency perspective, this has both pros and cons. Pros: Increased transparency and verifiability—but these rules also apply to standard debit or credit cards issued by your local bank. Cons: It’s neither anonymous nor pseudonymous: banks see your real name, not an EVM (Ethereum Virtual Machine) or SVM (Solana Virtual Machine) address. Plus, you still need KYC (identity verification).
Limitations Still Exist
Some might argue that the advantage of crypto cards lies in convenience: download the app, complete KYC, wait 1–2 minutes for verification, top up with crypto, and you're ready to go. Indeed, this convenience is a major highlight—but it's not available to everyone.
Citizens of Russia, Ukraine, Syria, Iraq, Iran, Myanmar, Lebanon, Afghanistan, and half of Africa—if they lack residency in another country, they can't use cryptocurrency for daily spending.
But you might say, only 10–20 countries can't use most crypto cards—what about the other 150+? The issue isn’t whether “most people” can use them, but whether they align with crypto’s core values: a decentralized network, equal nodes, equal financial access, and equal rights for all. Crypto cards don’t meet these values because they aren’t truly crypto-native products.
Max Karpis offered a brilliant analysis of why “neobanks” are doomed to fail.
Actually, my only real experience using cryptocurrency for payment was booking a flight on Trip.com. They recently added a stablecoin payment option—you can pay directly from your wallet, and it's accessible to everyone globally.
My genuine recommendation: skip Booking, use Trip.com to experience real crypto payments. Here, you’ll find a genuine crypto use case and payment experience. I believe the endgame will look like this: wallet UX will be optimized for payments and spending, or (less likely) they’ll evolve into crypto cards (if crypto payments somehow become widespread).
Crypto Cards Function Like Cross-Chain Liquidity Bridges
Another interesting observation is that self-custodial crypto cards function similarly to cross-chain liquidity bridges.
This applies only to self-custodial cards: centralized exchanges (CEXs) issuing cards aren’t self-custodial, so platforms like Coinbase have no obligation to mislead users into thinking funds are fully under their control.
A good use case for CEX cards is providing proof of funds for government applications, visas, or similar activities. When using a crypto card linked to CEX balances, technically you remain within the same ecosystem.
But self-custodial crypto cards are different: they function like liquidity bridges. In this model, you lock funds (crypto) on chain A (crypto balance) and unlock fiat on chain B (real world).
This bridging mechanism in the crypto card space acts like the shovel during California’s gold rush—becoming a valuable link between crypto-native users and businesses wanting to launch their own cards.
@stablewatchHQ conducted an in-depth analysis of this bridging mechanism, defining it essentially as a “Card-as-a-Service” (CaaS) model. This is a critical point many overlook when discussing crypto cards. These CaaS platforms provide the infrastructure for issuing private-label cards.
Rain: The Core Protocol Behind Crypto Cards
You might not know this, but half of your favorite crypto cards are likely powered by @raincards. Rain is one of the foundational protocols in the neobank system because it handles nearly all the technical backend for crypto cards. What these crypto card companies actually do is simply put their branding on the card (harsh as it sounds, this is the truth).
To help you understand how Rain works and how simple setting up a crypto card can be, I made this diagram.
(Zoom in for clarity.)
Rain enables companies to issue their own crypto cards. Frankly, Rain’s execution model could extend beyond crypto to become broader infrastructure. So don’t assume teams need to raise tens of millions to launch a crypto card. They don’t need that—they just need Rain.
I mention Rain repeatedly because people vastly overestimate the effort required to launch a crypto card. Maybe I’ll write a dedicated article on Rain someday, as this technology is severely underrated.
Crypto Cards: No Privacy, No Anonymity
The lack of privacy and anonymity in crypto cards isn’t a flaw of the cards themselves, but rather a problem ignored by those promoting them under the guise of “crypto values.”
Privacy isn’t a widely adopted feature in cryptocurrency. Pseudoprisvacy (pseudonymity) exists because we see addresses, not names. However, if you’re someone like ZachXBT, Wintermute’s Igor Igamberdiev, or Paradigm’s Storm with strong on-chain analysis skills, you can significantly narrow down the link between an address and a real identity.
Of course, compared to traditional cryptocurrency, crypto cards are worse—they don’t even offer pseudoprivacy. Because when you activate a crypto card, you undergo KYC (identity verification), and in reality, you’re not activating a crypto card—you’re opening a bank account.
If you’re in the EU, your crypto card provider still submits some data to the government for tax or other governmental purposes. Now, you’ve given the government an extra opportunity to track you: directly linking your crypto address to your real identity.
Future Money: Personal Data?
Cash still exists (currently the only anonymous payment method, aside from the seller seeing you) and will continue to exist for a long time. But eventually, everything will become digital. And current digital payment systems offer zero privacy benefits to consumers: the more you spend, the more you pay, and in return, they learn more about you. What a “great” deal!
Privacy is now a luxury, and this will persist in the crypto card ecosystem. An interesting idea is that if we achieve strong privacy protection—even to the point where businesses and institutions would pay for it (not by exploiting user data like Facebook, but based on our consent)—then privacy could become a form of currency in the future, possibly the only form in a jobless, AI-driven world.
If Crypto Cards Have a Bleak Outlook, Why Develop Tempo, Arc Plasma, and Stable?
The answer is simple—to lock users into ecosystems.
Most non-custodial cards choose L2 networks (like MetaMask on @LineaBuild) or independent L1s (like Plasma Card using @Plasma). Ethereum and Bitcoin are generally unsuitable due to high fees and slow transaction confirmations. Some cards use Solana, but it’s still a minority (no intention to spark another debate here).
Of course, companies choose different blockchains not just for infrastructure reasons, but also for economic incentives. For example, MetaMask chose Linea not because it’s the fastest or most secure, but because both Linea and MetaMask belong to the larger ConsenSys ecosystem.
I specifically mention MetaMask because of its choice of Linea. As most know, almost nobody actually uses Linea—it lags far behind other L2s like Base or Arbitrum.
But ConsenSys made a smart move by making Linea the underlying support for its card, locking users into the ecosystem. By offering good UX, users gradually get used to it, needing it less frequently. Linea naturally attracts liquidity, volume, and other metrics—not through liquidity mining or begging users to bridge across chains.
This strategy resembles Apple’s approach when launching the iPhone in 2007, keeping users within iOS and gradually habituating them to the point where switching ecosystems becomes difficult. Never underestimate the power of habit.
EtherFi: The Only Crypto Card That Truly Embodies Crypto Spirit
After careful thought, I conclude that @ether_fi might be the only viable crypto card that truly aligns with crypto’s core principles. (This research wasn’t sponsored by EtherFi, though I wouldn’t mind if it were.)
In most crypto cards, your deposited cryptocurrency gets sold, and the balance is topped up in cash (similar to the liquidity bridge model I mentioned earlier).
EtherFi is different: It never sells your crypto. Instead, it uses your crypto as collateral to provide cash loans while generating yield from your assets.
EtherFi’s model is similar to Aave. Most DeFi users want seamless cash loans from crypto assets, and EtherFi has already achieved this. You might ask: “How is this different from regular crypto cards? I can top up crypto and use the card like a regular debit card—this extra step seems unnecessary.”
Simply put, the difference lies in taxes: Selling your crypto is a taxable event, sometimes even taxed more heavily than regular spending. For most crypto cards, every transaction is taxed, ultimately requiring you to pay more to the government. (Again, using a crypto card doesn’t mean you’re “bankless.”)
EtherFi improves on this because you’re not actually selling your crypto—you’re taking out a loan against it.
Just this aspect alone (plus no foreign exchange fees, cashback, and other perks) makes EtherFi the best example of convergence between DeFi and TradFi (traditional finance).
Most crypto cards try to appear “crypto-native” but are actually just liquidity bridges. EtherFi, however, primarily serves crypto users rather than blindly pushing crypto to the masses. Their strategy is to bring crypto to natives first, letting natives spend in front of the public until the public realizes how cool it is.
Among all crypto cards, EtherFi might be the only one that can stand the test of time.
I prefer to see crypto cards as experimental grounds, but unfortunately, most teams exploit narrative hype without giving proper recognition to the underlying systems and actual developers.
We’ll see where technological progress and innovation take us. Currently, the crypto card space is indeed expanding horizontally (“globalization”), but lacks depth in vertical growth. For early-stage technologies focused on consumer payments like crypto cards, vertical growth is crucial.
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