Author: Fairy, ChainCatcher
Editor: TB, ChainCatcher
The crypto industry is staging a peculiar "materialization" movement: card issuance.
Using USDT to order takeout, shop on JD.com, or even pay at street convenience stores, digital assets that originally only existed on screens are now quietly entering the real world through crypto cards.
Is card issuance the golden key to bridging Web3 and the real world, or just a brief traffic game?
This article will deconstruct the driving factors, competitive landscape, and potential risks behind this crypto payment wave, to clearly see this industrial leap.
Crypto Card War Fully Launched
Capital is betting, and projects are racing. According to RootData, there are currently 37 projects focusing on crypto card business, many of which have received significant investments from top institutions. For example, the crypto credit card project KAST completed a $10 million seed round led by Sequoia China and Sequoia India; the crypto card issuer Rain secured $24.5 million in funding with Norwest Venture Partners leading, and investors like Coinbase Ventures and Circle Ventures following.
Crypto card projects overview:
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From "万链" and "万所", now evolving to the "万卡 era". This race is not just a stage for startups. More and more top players are personally entering the field, with exchanges, wallets, and public chains all eager to occupy a place in this key entry point for on-chain assets moving to offline consumption.
The market is already full of crypto card products, here's a comparison of some representative projects:
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Meanwhile, more cards are on the way:
- OKX will launch OKX Card in partnership with Mastercard
- Kraken has reached an agreement with Mastercard to launch a crypto debit card
- MetaMask, CompoSecure, and Baanx will jointly launch a "metal card"
- ....
A single card has become a key bridge between Web3 and the real world, and a symbolic marker of crypto assets moving from "speculative items" to "usable items". It is both a bridge and a battlefield - what is brewing behind this seemingly bustling card issuance trend?
The Business of Crypto Cards
Essentially, crypto cards are a type of prepaid card. When users load USDT, USDC, and other stablecoins into the card, they are not "converting" these assets into card balance, but rather having the issuer allocate a corresponding limit in a bank account within the traditional Visa/Mastercard system.
The operating mechanism behind this is a highly centralized funding model, mainly divided into three parts: asset custody (to meet user withdrawal needs), asset interest generation (to obtain returns), and asset advance (for fiat currency exchange).
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In this model, the card issuing platform's profit sources are relatively clear: on one hand, card fees and exchange handling fees, and on the other, operational income from platform deposited funds. However, as seen in the previous crypto card comparison, fee competition has already "opened", with almost all platforms lowering fee thresholds to attract users, and even adding "sugar coating" - airdrops, consumption rebates, discounts.
Therefore, crypto cards are actually a thin-margin business. Platforms can only achieve sustainable profitability when they achieve large-scale turnover and fund deposits. For platforms, the essence of this business is competing for users' "payment entry points". The real contest is not just about brand building and channel occupation, but a battle for user traffic.
Additionally, exchanges and wallets have natural advantages in expanding this business, which not only helps enrich their business matrix but also enhances market potential and development ceiling.
Waves and Reefs
This "card issuance wave" brings many opportunities, but also hidden challenges and risks. The industry has various interpretations about the value and challenges of crypto cards.
From a geographical perspective, different markets have varying levels of acceptance for U cards. Researcher @sjbtc9 points out that in Australia, Europe, America, and Latin America, crypto cards are popular as they can avoid high inflation and compensate for insufficient local financial services. In contrast, in regions with well-established regulatory systems like Singapore, users already have smooth withdrawal channels, so the demand for crypto cards is relatively cold. In the domestic market, crypto cards are often used to pay for overseas service subscriptions like ChatGPT.
Moreover, crypto cards play a "intermediary replacement" role in some regions. For example, in contexts with high OTC trading risks, U cards provide a more direct and stable fund entry and exit channel.
But reefs are also surging. Compliance and risk control are challenges that crypto cards cannot avoid. Crypto KOL Yue Xiaoyu once shared that OneKey Card quickly became popular due to its excellent product experience, but was forced to suspend mainland KYC and eventually shut down its card business due to compliance pressure. This not only exposed the high uncertainty under policy regulation but also reflected the difficulty of expanding crypto card business when user growth is sluggish.
As community user @agintender says, beneath the surface of crypto cards is a "risk control hell": how to handle frozen, stolen, or recoverable funds, how to cooperate with investigations, how to manage user fund flow levels, and how to establish reasonable customer profiling and narrative capabilities are core issues that crypto cards must solve.
Security risks are also an unavoidable hidden danger. In February this year, card merchant Infini was attacked, losing over $49 million. Crypto KOL @_FORAB revealed that after the incident, multiple U card service providers entered maintenance status, and some even suspended card issuance. This incident demonstrates that security and risk prevention are key to the continued development of crypto cards.
The card issuance tide is not just about card competition, but a battle for passage rights between Web3 and the real world. Each metal card flashing is not just a brand logo, but a knock on mainstream society's door by the crypto economy.
Success or failure, who will emerge, time will provide the answer.
