Why Cryptocurrency Cards Are Not the Future—An Industry Insider's In-Depth Reflection

Starting with the Industry Issue: Many People Misunderstand the Nature of Cryptocurrency Cards

When it comes to crypto payment cards, many users believe this means they are “bankless.” But the reality is—the issuing bank is the true controller.

A crypto card looks high-end, with a shiny cyberpunk logo, but essentially, it’s still a bank card. The issuing bank behind it holds all the power: setting rules, determining compliance standards, and most importantly—they can freeze your account, company, or even the entire bank at any time.

This creates an interesting paradox: An industry born to pursue decentralization now hands over all control to traditional financial institutions.

Crypto Cards Are Just Surface-Level Innovation; Their Essence Remains Traditional Finance

Let’s honestly look at these products:

Three Unchangeable Facts:

• You are using the Visa or Mastercard network, not Ethereum or other blockchains
• You are connected to a traditional bank account, not your crypto wallet
• You are spending fiat currency, not actual crypto assets

Most crypto card companies just slap a label on a regular bank card. They survive through market hype, but this business model is doomed to be short-lived—these cards will become invalid before 2030.

In fact, creating a crypto card is technically not complicated. An underlying protocol called Rain provides the infrastructure for the entire ecosystem, and almost all your favorite crypto card products are based on the same technology. This means the entry barrier is much lower than you think—you don’t need to raise hundreds of millions of dollars, just obtain Rain’s technical license.

Hidden Costs: Additional Layers Mean Extra Fees

Every conversion layer from crypto assets to real-world spending incurs costs:

• Spreads
• Withdrawal fees
• Transfer fees
• Sometimes even storage fees

These costs seem negligible, but due to compound effects, every saved dollar translates into actual gains. More importantly, every transaction made with a crypto card is a taxable event—many regions treat it as a sale of crypto assets, with tax burdens far higher than regular spending.

So what’s the ideal usage scenario? Pay directly with stablecoins, Solana, or Ethereum—eliminating the lengthy USDT→Crypto Card→Bank→Fiat route.

Privacy Concerns: Crypto Cards Are Not Anonymous at All

Here’s an uncomfortable truth:

Once you open a crypto card through KYC (Know Your Customer), you are essentially opening a bank account. You are not hiding your identity—the issuing bank sees your real name, not an EVM or SVM address.

Moreover, according to local laws:

• In the EU, the government already has access to your interest income, suspicious transactions, certain investment gains, and more
• If the issuing bank is in the US, regulatory transparency is even higher

The crypto space does have false privacy—creating pseudonymous addresses with fake identities. But for those capable of on-chain analysis (like ZachXBT or Igor Igamberdiev of Wintermute), identifying the real identity behind an address is not difficult.

And crypto cards are even worse: regulators now have a direct tracking path—link your crypto wallet address to your real identity.

Why Are Some Companies Still Developing Crypto Cards? Ecosystem Lock-in

If crypto cards have no future, why are companies still investing in development? The answer is simple: user stickiness.

Look at MetaMask choosing Linea as its underlying network for crypto cards. On the surface, it’s a technical choice; in reality, Linea and MetaMask both belong to the ConsenSys ecosystem, which is a strategic decision.

Linea’s performance in Layer 2 is not outstanding—Base and Arbitrum attract more users. But ConsenSys cleverly integrated Linea into its daily-use products. Users gradually get used to a good user experience, naturally bringing liquidity, trading volume, and other metrics to Linea—without relying on liquidity mining or forced cross-chain moves.

It’s like Apple releasing the iPhone in 2007: once users get accustomed to the iOS ecosystem, it’s hard to switch to other systems. Never underestimate the power of habit.

Crypto Cards Lack True Democratic Commitment

What is the core value of the crypto movement? Financial democratization and borderless access.

But in reality, residents of Russia, Ukraine, Syria, Iraq, Iran, Myanmar, Lebanon, Afghanistan, and most of Africa—if they lack residence rights in other countries—cannot use crypto cards for daily spending.

That’s just a limitation in dozens of countries; what about the remaining 150+ countries? The issue isn’t whether most people have access, but the core promise of crypto: the equality of nodes in a decentralized network, equal financial access, and equal rights for all.

Crypto cards fundamentally cannot provide this, because they are not truly decentralized solutions.

What should the real use case be? A concrete example is Ctrip’s recent addition of stablecoin payment options—users can pay directly from their wallets, accessible worldwide. This is the real crypto payment scenario and genuine application.

Issuing Banks vs. Self-Custody Cards: Two Completely Different Mechanisms

Here’s a subtle but important distinction:

Cards issued by centralized exchanges (like those from major trading platforms) and self-custody crypto cards operate very differently.

Self-custody cards function similarly to cross-chain bridges:

• You lock crypto assets on one chain
• The system unlocks equivalent funds in the “real world” (fiat layer)

This CaaS (Card-as-a-Service) model is a key innovation—brands can quickly issue their own cards using these platforms without developing infrastructure themselves.

But centralized exchange cards are different: funds always remain within the exchange’s ecosystem, and there’s no true cross-chain or cross-border transfer.

ether.fi: The Only Truly Game-Changing Attempt

After careful consideration, ether.fi might be the only crypto card solution that truly aligns with the spirit of crypto.

Most crypto cards operate as follows: sell your crypto assets, then top up your fiat account balance.

ether.fi works completely differently:

• It never sells your crypto assets
• Your crypto continues to generate yields (similar to Aave lending)
• The system provides you with fiat loans for use

Why is this important? Because selling crypto assets is a taxable event, often with heavy tax burdens. Most crypto cards tax every transaction, meaning you pay more taxes (again, using crypto cards does not mean you are out of the banking system).

ether.fi cleverly circumvents this—you’re not selling assets, just borrowing funds. Plus, no USD fees, cashback, and other advantages, demonstrating the true synergy of DeFi and traditional finance.

While most crypto credit cards try to masquerade as bridging tools, ether.fi genuinely puts users first, not just promoting crypto to the masses. It provides local users with crypto access and encourages them to use it publicly—not rushing to get ordinary consumers onboard immediately.

Among all crypto cards, ether.fi is most likely to stand the test of time.

Final Thoughts: Experimental Scene vs. Genuine Innovation

Crypto cards are a great testing ground, but unfortunately, most teams are just riding narratives for hype, neglecting the underlying systems and developers.

What will the future hold? We’ll see.

Currently, crypto cards show a clear trend of global expansion (horizontal growth), but lack the necessary vertical depth for development—something crucial for consumer tech startups (like crypto cards). True breakthroughs come not from quantity but from quality innovation.