Who issues a crypto card, and why stablecoins are rewriting the economics - part 2

Behind every crypto card sits a hidden chain of banks, licences, and infrastructure providers - and increasingly, a stablecoin doing the heavy lifting.

We continue our series on explaining crypto cards with Part II. In Part I of this series, we looked at why crypto cards now, and how they work behind the scenes - the mechanics of turning a digital asset into a tap-to-pay transaction. Today’s instalment maps the crypto cards ecosystem, breaks down the debit, credit, and secured products it produces, and explains why the funding asset now matters as much as the card itself. Moreover, it goes a level deeper by explaining how the ecosystem of banks, EMIs, and infrastructure providers fits together, and why stablecoins are no longer just one funding option among several but the force reshaping the entire category's economics.

Who issues a crypto card? Explaining the ecosystem

This is a question worth asking directly, because the brand on the card is often not the entity that legally issues it, and understanding this structure is essential before looking at specific products in the market. Card programmes generally involve three separate parties.

The first is the programme provider, the brand a customer recognises, such as Crypto.com, Coinbase, Nexo, Bybit or Bitpanda. This company builds the app, manages the crypto account, handles custody and conversion, runs the rewards programme and provides customer support. What it usually does not do is issue the payment card itself.

That responsibility sits with the second party, a licensed bank or Electronic Money Institution. This entity holds the payment licence, complies with card scheme rules, connects to Visa or Mastercard, and performs the actual authorisation and settlement of transactions. Coinbase Card in the US, for instance, is issued by Pathward, a federally insured national bank, under a licence from Visa, with the programme's technical infrastructure powered by Marqeta. Crypto.com's Visa Card, depending on the market, is issued either by partner banks or by the company's own regulated entities, such as Foris MT Limited. Foris holds a Visa Principal Member (Issuing) license specifically and is a Malta-incorporated Electronic Money Institution. In the US, the card is issued separately by Community Federal Savings Bank. This structure will be familiar to anyone who has looked closely at fintechs like Revolut or Wise, where the consumer-facing brand and the legal issuer are rarely the same company.

The third party is the card network itself, Visa or Mastercard, which routes transactions, communicates with the issuer, and connects to millions of merchants worldwide, without ever issuing a crypto card directly.

An airline credit card is a useful analogy for anyone still finding this confusing. A Lufthansa-branded Mastercard is not issued by Lufthansa. A bank issues it, providing the regulated payment account, the credit line, and the card infrastructure, while Lufthansa contributes branding, rewards, and its loyalty programme. Crypto cards work in almost the same way, with a crypto platform playing the Lufthansa role and a bank or EMI standing behind it.

The market is starting to blur these lines. Some larger crypto companies are becoming principal members of Visa or Mastercard or issuing cards through their own regulated subsidiaries rather than leaning entirely on partner banks. Visa's head of crypto, Cuy Sheffield, has framed the network's own posture plainly, describing the company's ambition to meet businesses wherever they operate, and increasingly, that's onchain.

Infrastructure providers are accelerating this shift too. Bridge, the stablecoin infrastructure platform acquired by Stripe for around 1.1 billion dollars in February 2025, has partnered with Visa to let developers issue stablecoin-linked Visa cards programmatically across multiple countries through a single integration, an arrangement already live in eighteen countries and expected to reach more than a hundred by the end of 2026. Bridge co-founder Zach Abrams has described the broader ambition as helping fintechs own their own financial stack, rather than depending entirely on partner banks for every part of the payment chain. The underlying principle has not changed even as the players multiply: every payment card ultimately needs a regulated issuing entity behind it, whatever brand the customer sees on the plastic.

Card processors themselves are moving in the same direction. In 2026, Marqeta partnered with Zerohash to let any of its existing clients embed stablecoin-linked spending into card programmes without rebuilding core infrastructure - a meaningful shift given how many large platforms already run on Marqeta’s rails, from Square and Uber to Affirm and Klarna. The timing tracks the broader trend: Visa alone ran more than 130 stablecoin-linked card programmes across over 50 countries in the prior year, with volume up 319% to roughly USD 5.2 billion, and expects that programme count to roughly double in 2026.

It illustrates a split forming in the market: distribution-first players like Marqeta, which already have thousands of live programmes to switch this on, versus economics-first challengers like Rain, which, as a Visa principal member, keeps a larger share of interchange by issuing directly rather than splitting it across a sponsor bank, programme manager, and processor.

Stablecoins are changing the economics of crypto cards

If crypto cards are the interface most people will touch, stablecoins are increasingly the real story underneath them, and this deserves treatment as its own topic rather than as a footnote to card products.

Historically, spending a volatile asset like Bitcoin meant converting it to fiat at the exact moment of purchase, introducing both price risk and, in many jurisdictions, a taxable disposal event on every coffee. A stablecoin such as USDC is designed to hold a steady value against a fiat currency, removing much of that volatility and making digital asset spending far more predictable for consumers and merchants alike. Circle chief executive Jeremy Allaire has been explicit about why this predictability matters commercially, telling investors during a first quarter 2026 earnings call that the company is focused on driving the utility value of this new form of money, pointing specifically to real transaction volume rather than passive holding as the basis for building a sustainable network.

The scale involved is no longer trivial. Circle has reported that USDC alone facilitated USD 21.5 trillion in onchain transaction volume in the first quarter of 2026 - a figure that, by some external comparisons, already exceeds Visa's annual payment volume. The comparison should be read with caution, however, given how much of that volume reflects institutional settlement, exchange activity, and even bot-driven transfers rather than retail spending - Visa's own ‘adjusted’ methodology, which filters out non-economic activity, puts USDC's share of genuine stablecoin transaction volume at a still-substantial 63%, rather than the full raw total.

What is less disputed is the direction of travel among the infrastructure players themselves. At the end of June 2026, a new industry consortium called Open USD launched with backing from more than 140 companies spanning payments, banking, and technology, including Visa, Mastercard, Stripe, Coinbase, BlackRock, and Google, aiming to create a new stablecoin that could challenge the existing duopoly of Circle's USDC and Tether's USDT. Whatever the outcome of that initiative, the fact that card networks, banks, and technology platforms are simultaneously backing a shared stablecoin project is itself a signal of how central this infrastructure has become to their planning.

For card issuers specifically, stablecoins solve a genuine product problem rather than simply adding a marketing angle. They let providers offer a funding asset that does not expose the user to Bitcoin-style volatility mid-transaction and reduce the frequency of taxable disposal events in jurisdictions that treat every crypto-to-fiat conversion as a taxable sale. In the US, for instance, the IRS treats every crypto-to-fiat conversion as a taxable disposal event, meaning a five-dollar coffee paid for with Bitcoin can trigger a capital gain or loss calculation just like selling a stock. The UK and Australia apply a similar principle. Stablecoins don't eliminate this entirely, but because their value rarely moves against the dollar, any resulting gain or loss is typically negligible.

Moreover, they open the door to settlement models where the merchant or payment service provider can choose to receive stablecoins directly rather than fiat, something that was not practically possible a few years ago. Rain, a stablecoin infrastructure startup valued at 1.95 billion dollars in a January 2026 fundraise, illustrates this shift well. The company works with neobanks that want customers to settle card charges from stablecoin deposits rather than fiat, and its expansion into a Mastercard partnership in May 2026 was explicitly aimed at larger institutions already committed to a single card network. Rain co-founder and chief executive Farooq Malik told Fortune that many of these enterprise clients are interested in the innovation but are simply not in a position to renegotiate their existing network relationships midstream, which is precisely why working with both major networks matters commercially.

The different types of crypto cards, explained

Crypto cards come in a few distinct forms, though many share a similar underlying model. As in traditional finance, the market splits broadly into debit and credit products. Within credit cards specifically, there's a further split between unsecured cards - which run on a standard credit check and secured cards, which use crypto or stablecoins as collateral instead.

Debit and prepaid cards

A crypto debit card draws directly from an existing crypto balance, so spending is capped at whatever the account holds. If a wallet contains five hundred dollars in Bitcoin, that is the spending limit. Some cards require the user to manually convert crypto to a fiat balance before spending, while others convert automatically at the point of sale.

A handful of well-known examples illustrate the range on offer. Coinbase Card is a Visa prepaid debit card available in the US, the UK, and parts of Europe, letting users spend directly from their Coinbase balance with instant conversion and rotating crypto-back rewards of up to 4% on selected purchases, with no annual fee.

Crypto.com's Visa Card is a tiered prepaid product built around lifestyle perks such as airport lounge access and streaming rebates, with rewards up to 5% according to the company's own marketing, though earning the highest tiers requires staking a substantial amount of the platform's native CRO token.

Wirex, a hybrid Visa and Mastercard product popular across Europe and other markets, offers Cryptoback rewards in its WXT token. Reward rates vary by region, account tier, and promotion, with higher tiers offering substantially higher rates; Wirex has advertised rates of up to 8% and, under some current promotions, even higher.

Bybit's own growth figures illustrate the scale of the market: the company says its Bybit Card reached two million users in 2025 and three million in 2026, as it expanded the card into a broader payment offering.

Across all of these, the common thread is simplicity: the card spends only what's already funded, with the differences lying almost entirely in rewards structure and which token the provider wants you locked into.

Credit cards

Within the credit card category, two distinct models exist: an unsecured version that runs on a standard credit check, and a secured version that uses crypto itself as collateral instead. Together with debit/prepaid cards, that makes three broad types of crypto cards overall - this section covers the two credit variants.

Unsecured crypto credit cards

The first, and by far the most common, is the unsecured model. A crypto credit card works much like any other rewards credit card. The issuer (not the user's crypto account) fronts the money for each purchase, and the user pays that balance back later, typically monthly. The only real difference is where the rewards land: instead of cashback or air miles, spending earns a small percentage back in cryptocurrency. Spend a thousand dollars, and the card might return twenty dollars' worth of Bitcoin.

The fee structure varies considerably by provider. Depending on the product, users may encounter annual or subscription fees, interest on unpaid balances, cash-advance fees, foreign-exchange or transaction fees, late-payment charges, and card-replacement fees. Some products, however, waive several of these: Gemini's card, for example, has no annual or foreign-transaction fee.

Because these products can be structured as genuine credit products, the underwriting and credit-reporting model varies by provider. Gemini, for example, performs a hard credit inquiry for the full application and reports account information and payment history to Experian and Equifax, meaning the card can affect a consumer's credit profile. Brex, by contrast, does not conduct personal credit checks and reports payment performance to business credit bureaus instead.

Spending limits vary widely by provider and applicant, ranging from a few hundred dollars to tens of thousands in some cases, depending on factors such as creditworthiness, income, and spending behaviour. The more established players in this space, including Gemini and Crypto.com, explicitly position crypto rewards as a way for customers to accumulate digital assets through everyday spending.

Coinbase has pushed this further with its own credit product. The Coinbase One Card, issued by First Electronic Bank on the American Express network, is available exclusively to paying Coinbase One subscribers and offers up to 4% back in Bitcoin depending on how much a user holds on the platform.

Secured crypto credit cards

The second model, the secured crypto credit card, flips the underwriting logic entirely: instead of a credit check, the user posts crypto as collateral upfront, and the issuer's risk is covered by that collateral rather than by an assessment of creditworthiness. In June 2026, Coinbase extended its own card in exactly this direction, launching a USDC-secured version aimed at users who can't qualify for the unsecured card on credit history alone: applicants pledge a portion of their USDC holdings as collateral, and - notably - continue earning yield on that collateral while it sits locked, rather than it going idle as with a typical secured card deposit.

Nexo's card is a widely cited example of this model more broadly, letting users borrow against their crypto holdings rather than selling them. The issuer sets the credit limit as a fraction of the collateral's value, with the applicable loan-to-value ratio varying by asset. Nexo, for example, currently lists LTV ratios ranging from 15% for its NEXO token to 90% for certain stablecoins, with assets such as Bitcoin and Ethereum carrying lower LTVs.

Because the underlying crypto is used as collateral rather than sold, borrowing against it may avoid the taxable disposal associated with a sale in some jurisdictions, although the tax treatment varies by country and individual circumstances. The trade-off is real: if the collateral's value falls sharply, the issuer can trigger a margin call and liquidate the holdings to cover the balance, a risk that mirrors margin lending in traditional finance rather than anything unique to crypto.

Understanding who stands behind a crypto card - and how stablecoins are quietly becoming the asset of choice funding it - sets up the more practical questions this series turns to next.

Why do consumers reach for these cards over a regular debit card? What are the real benefits and trade-offs, and what should a spender or a business know about tax exposure and regulation before getting involved? In the next instalments, we look at consumer adoption patterns, weigh the genuine advantages against the friction points, unpack the regulatory landscape shaping this market, map the players competing to lead it, and close the series by asking where crypto cards go from here - because on the evidence so far, they look less like a novelty and more like the opening chapter of a much longer story.

About author

Mirela Ciobanu is Lead Editor at The Paypers, bridging the knowledge gap between TradFi and DeFi. With a keen eye for industry trends, she is constantly on the lookout for the latest developments in crypto and blockchain. Closely connected with subject-matter experts in the digital assets space, Mirela amplifies your voice through compelling interviews, webinars, reports, and articles. 

To share more ideas and get inspired, connect with Mirela on LinkedIn or reach out via email at mirelac@thepaypers.com.