Crypto cards explained: how digital assets became everyday payment tools – part 1

‘The payments industry has quietly solved one of crypto's oldest usability problems by embedding digital assets into the existing card ecosystem’. Mirela Ciobanu, The Paypers

From Bitcoin pizza day to spending crypto anywhere

In May 2010, Florida programmer Laszlo Hanyecz paid 10,000 Bitcoin for two pizzas, a transaction now worth a small fortune and commemorated every year as Bitcoin Pizza Day. At the time, spending Bitcoin meant finding someone willing to accept it directly, an awkward, manual exchange that depended on trust between strangers.

Fifteen years later, buying pizza with digital assets looks very different. Rather than asking merchants to accept cryptocurrency, today's crypto cards allow consumers to pay through the same Visa and Mastercard networks they already use every day. The customer taps a card or phone, the merchant receives local currency, and the blockchain activity remains largely invisible.

That shift - from asking merchants to embrace crypto to embedding digital assets within existing payment infrastructure - is what has transformed crypto cards from a niche experiment into a growing area of interest for banks, payment service providers, fintechs, and merchants. 

Increasingly, the funding source behind those cards isn't Bitcoin but stablecoins. Bitcoin's price can swing sharply within a single day, making it a poor fit for everyday spending, where both merchants and customers expect the value of a transaction to hold steady. Stablecoins, whose relatively stable value makes them better suited to everyday payments, solve that problem directly. In markets with volatile local currencies or limited banking access, spending dollar-backed stablecoins can offer a practical alternative for everyday transactions.

Elsewhere, crypto cards appeal to digitally native consumers who want to use their digital assets without first moving funds back into a bank account. However, whether funded by Bitcoin, Ether, or stablecoins, the experience increasingly resembles any other card payment: the technology remains behind the scenes while the familiar checkout experience stays the same.

This series of three articles explores what crypto cards are, how they work, who issues them, how money moves between wallets, issuers, and merchants, and why stablecoins are becoming the dominant funding source for the next generation of digital payment cards.

Why crypto cards matter now

For much of the past decade, crypto cards remained a niche product aimed primarily at early adopters who wanted to spend a portion of their digital assets without first transferring funds back into a bank account. While the concept attracted attention, real-world usage remained limited, and the supporting infrastructure was still immature.

That picture has changed significantly over the past two years. According to research by Artemis, cited by CoinDesk, there are two distinct ways consumers are spending stablecoins today: sending them directly, peer-to-peer, and using crypto cards at checkout. Of the two, cards are growing far faster. Monthly crypto card spending rose from around USD 100 million in early 2023 to more than USD 1.5 billion by late 2025 - an annualised run rate of roughly USD 18 billion, expanding at a 106% compound annual growth rate. Peer-to-peer stablecoin transfers, by comparison, grew just 5% over the same period, reaching an annualised USD 19 billion. Crypto cards are a payment mechanism; stablecoins are increasingly what powers it.

In other words, card-based spending has nearly closed the gap with direct transfers in just two years, positioning payment cards as one of the primary ways consumers are expected to spend stablecoins going forward. It's worth separating the two: crypto cards are the payment mechanism, largely indifferent to which asset funds them; stablecoins are increasingly what fills that mechanism, because their price stability makes them usable for everyday spending in a way Bitcoin never was.

The reason is not that merchants have suddenly embraced blockchain technology. Quite the opposite. Crypto cards succeed because they allow digital assets to travel across existing payment infrastructure. Consumers can fund purchases with Bitcoin or, increasingly, stablecoins as we have noticed so far, while merchants continue to receive settlement through the familiar Visa and Mastercard networks without changing their checkout systems or understanding blockchain technology. For most merchants, nothing about the payment experience looks different.

Several structural developments have converged to make this possible. Stablecoins have emerged as the preferred digital asset for payments thanks to their relatively stable value, while advances in custody, wallet infrastructure, compliance technology, and issuer platforms have made launching and operating crypto card programmes considerably simpler than only a few years ago. At the same time, global payment networks have shifted from treating stablecoins as an adjacent innovation to integrating them into their own settlement strategies.

Visa and Mastercard's recent moves illustrate this shift. During Visa's fiscal Q2 2026 earnings call, CEO Ryan McInerney revealed that the company now supports more than 160 stablecoin card programmes globally, developed in partnership with infrastructure providers including Rain, Reap, and Bridge. Mastercard has been equally active, announcing in March 2026 its acquisition of London-based stablecoin infrastructure provider BVNK in a deal worth up to USD 1.8 billion, its largest crypto-related acquisition to date.

Explaining the rationale behind the investment, Mastercard Chief Product Officer Jorn Lambert said the company expects that ‘most financial institutions and fintechs will, in time, provide digital currency services’, whether through stablecoins or tokenised deposits. The statement reflects a broader industry view: stablecoins are increasingly seen not as a replacement for existing payment networks, but as another funding source and settlement rail that can operate alongside cards, bank transfers, and real-time payment systems.

At the same time, the industry's expectations remain measured. During the same earnings season, executives at both Visa and Mastercard noted that stablecoins have yet to demonstrate broad product-market fit for everyday consumer payments in developed economies, where most digital asset activity continues to be investment-related rather than payment-driven.

The reality, therefore, is more nuanced than either the industry's enthusiasm or its scepticism might suggest. Crypto cards are still a relatively small part of the global payments landscape, but they are growing rapidly as the infrastructure supporting them matures. Rather than replacing traditional payment systems, they are increasingly embedding digital assets within them, allowing consumers to spend crypto through familiar card experiences while enabling banks, fintechs, and payment providers to experiment with new forms of digital money without reinventing the checkout.

Understanding crypto cards. What is a crypto card?

A crypto card is a payment card, usually debit or prepaid and less commonly credit, that allows consumers to spend the value of digital assets using existing card networks such as Visa and Mastercard. While the customer funds purchases using cryptocurrency or stablecoins, the merchant typically receives payment in fiat currency through the same acquiring infrastructure used for traditional card payments. The blockchain remains largely invisible during the transaction, with the card provider managing asset conversion, authorisation, and settlement behind the scenes.

In effect, a crypto card democratises access to the value held in digital assets. It turns cryptocurrency from a speculative position into something that can be spent at a supermarket till, without giving up the convenience, security, and global reach of the card networks people already trust.

Although often described collectively as 'crypto cards', these products vary considerably depending on how they are funded and who controls the underlying assets. In practice, the large majority issued today are debit or prepaid, for reasons tied to regulation and risk that we'll unpack later when we look at who issues these cards and how.

How crypto cards work behind the scenes

Getting started with a crypto card looks much like opening any other financial product. A user chooses a provider, signs up, and verifies their identity as part of standard Know Your Customer checks, a step that matters as much to a bank executive evaluating this space as any technical detail, since it means crypto cards sit inside the same anti-money laundering framework as any other regulated payment product. Once the account is live, the user links a cryptocurrency wallet, either an external one or the built-in wallet the provider offers, and funds it.

To be able to make purchases, the consumer goes through a similar process as with any card. At a physical terminal, the user taps, inserts, or swipes the card exactly as they would a normal debit card, and the required amount of cryptocurrency is converted to fiat in real time at the prevailing exchange rate. Online, they enter card details at checkout, and the same conversion happens invisibly. ATM withdrawals work similarly, with crypto converted to cash at the point of withdrawal. Standard protections apply throughout: PIN and chip security, two-factor authentication, transaction monitoring for suspicious activity, and the ability to freeze a card instantly if it is lost or compromised.

A natural question follows for anyone new to the space: is a crypto card always linked to a wallet in the sense of something the user personally controls? Not quite. In most cases, it is linked to a crypto account, which may or may not include a wallet the user directly controls, and a crypto card can exist as a physical card or as one held entirely inside a digital wallet on a phone. Either way, it functions as a bridge between the blockchain economy and the traditional financial system, and understanding that bridge is the key to understanding everything else in this piece.

'The crypto card is no longer an experiment. It is a real working product, and we have many prominent players in the market who have been issuing these cards for quite a long time.' Sergejs Svircenkovs from Elcoin

A common misconception is that a crypto card is tied to one specific cryptocurrency.

In practice, most cards are linked to an account that can hold several digital assets, including stablecoins, and the user or the provider's default settings determine which one funds a given purchase. Consider a user holding USDC, Bitcoin, and Ether who makes a twenty-euro purchase in Berlin. The provider might automatically deduct twenty euros' worth of USDC, convert it to euros, and settle through the existing card network, with the merchant none the wiser about which asset funded the sale. It works much like a bank card used abroad, where someone holding Romanian lei can pay in euros without a separate euro card because their bank converts currency automatically in the background. The only real difference with a crypto card is that the source of funds is a digital asset rather than a second fiat currency. In crypto terminology, this conversion step is known as an off-ramp - the process of turning a digital asset into spendable fiat currency, the mirror image of an on-ramp, where fiat is converted into crypto. Every crypto card purchase is, in effect, an off-ramp transaction happening in real time.

A question any payments or finance professional will ask at this point: is that conversion - the on-ramp or off-ramp step - free, and if not, where do the costs sit? One thing worth being upfront about with a B2B audience: the conversion step is rarely free, even when a provider advertises no transaction fees. As with any foreign exchange, there is usually a spread between the market exchange rate and the rate the issuer applies, and that spread is where much of the provider's revenue sits. The true cost of a crypto card transaction depends on that spread as much as on any headline fee, a detail that matters more to a payments executive assessing margins than it does to a casual spender.

What makes a crypto card spendable?

There are two broad models governing how a crypto card connects to the money behind it, and the distinction matters more than most marketing material admits.

The custodial model is by far the most common, and it is how cards from providers such as Crypto.com, Coinbase, Bitpanda, and Bybit typically work. In a custodial wallet, the provider holds the keys, not the user - much like a bank holds your money in an account rather than handing you a vault. The user holds crypto within their account on the platform, where assets sit in custodial wallets managed by that provider. When a purchase is made, the provider converts the required amount of crypto into fiat, or uses a stablecoin settlement mechanism, and the merchant receives payment through the ordinary card network. Here it is more accurate to say the card is linked to a crypto account than to a wallet as such, since the user never directly controls the underlying private keys.

The self-custody model is newer and still far less common, though it is growing alongside stablecoin adoption. In this setup, the user's assets remain in their own non-custodial wallet, where they control the private keys throughout. The card provider requests authorisation to spend from that wallet, and conversion happens at the moment of purchase, with the funds pulled just in time rather than pre-loaded. Gnosis Pay, which links a Visa debit card directly to a self-custodial smart contract wallet, is one of the clearer examples of this approach operating in the UK and EU. It currently supports spending in specific stablecoins (EURe, GBPe, USDCe).

For a bank or PSP evaluating partnerships in this space, the model matters because it changes where counterparty risk sits: with a custodial card, the provider's solvency and security practices sit between the user and their funds, whereas with a self-custody card, that risk moves largely onto the user, in exchange for the user retaining control.

Understanding what a crypto card is and how it moves money behind the scenes is the foundation for everything else in this series. But it raises an obvious next question: who builds and issues these cards, and how does a purchase made with digital assets in a wallet end up as a normal-looking transaction on a merchant's till?

In the next instalment, we turn to the ecosystem itself - the exchanges, fintechs, and infrastructure providers competing to issue crypto cards - and to a shift already reshaping their economics: the growing role of stablecoins, which are steadily replacing volatile crypto assets as the preferred way to fund everyday spending.

 

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 in contact 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.