In recent years, cryptocurrency cards have been seen as a key bridge to bringing crypto into everyday payments, but does this path truly lead to a decentralized future? Hazeflow founder Pavel Paramonov raises these questions in a lengthy article , pointing out that most cryptocurrency cards not only fail to disrupt the traditional payment system but also strengthen the power structure of banks and Visa. He argues that cryptocurrency payment cards are merely a transitional product, not the ultimate solution for cryptocurrency payments.
Can public blockchains replace Visa? Cryptocurrency cards actually make them harder to replace.
Pavel's core argument is quite straightforward: "Cryptocards are merely a temporary solution to bring cryptocurrency to the masses and use it for payments."
However, cryptocurrency cards are unlikely to become a substitute for traditional payment systems; instead, they bring more value to Visa and Mastercard.
Pavel explained that public blockchains and L2 cryptocurrencies have long been keen to compare their TPS (transactions per second) with Visa or Mastercard, attempting to prove they can replace them. However, crypto cards are not disruptive tools; rather, they highlight the framework of traditional payment systems.
Visa and Mastercard still hold the most crucial power: they can suspend cards at any time, block specific companies or partner banks, and unilaterally set compliance and risk control standards.
This contradicts the permissionless and decentralized spirit pursued by cryptocurrencies and reveals the ceiling for the development of crypto financial cards.
Using encrypted financial cards ≠ de-banking: the essence remains traditional finance.
At the same time, Pavel also debunked a misconception: " Using crypto debit cards does not equate to de-banking. " In fact, crypto debit cards are still backed by bank accounts, users still need to undergo KYC (Know Your Customer) procedures, and are subject to the existing financial regulatory system, which means that crypto debit cards offer no privacy whatsoever.
In theory, the government can still obtain some information about user accounts, including earnings and transaction records. From a regulatory perspective, encrypted debit cards are not significantly different from regular debit cards:
Most crypto card companies are simply giving traditional financial products a crypto narrative and brand packaging. When users swipe their cards, they are actually spending fiat currency, not on-chain assets; you are relying on banks and card vendors, not wallets or public blockchains.
Each additional intermediary layer adds another layer of cost: the fee traps of encrypted debit cards.
In other words, in the payment process, crypto debit cards actually involve more intermediaries: "Stablecoin → Crypto debit card → Bank → Fiat currency → Merchant".
Pavel emphasizes that these additional intermediaries not only create a gap in the experience, but also include hidden exchange rate differences, conversion fees, and potential escrow costs.
He also mentioned one of his few experiences actually using cryptocurrency for payments: paying for an airline ticket directly with stablecoins on Trip.com: "Paying merchants directly through a wallet—that's the ultimate form of crypto payments."
Rain and CaaS: The True Value of the Cryptocurrency Card Industry
Pavel further points out that most crypto financial cards actually rely on the same infrastructure, namely "Card-as-a-Service (CaaS)" companies like Rain, which are responsible for card issuance, bank integration, and compliance processes, while front-end brands only need to white-label and market.
He emphasized that, under this structure, what truly possesses long-term value is often not the card-issuing brand, but rather the CaaS (Calories as a Service) provider that offers the infrastructure.
( Stablecoin payment provider Rain raises $58 million, with Samsung Next and Dragonfly participating )
Why are there still so many encrypted financial cards on the market? The answer is "ecosystem lock-in".
Despite the seemingly numerous problems, various projects continue to launch crypto financial cards. Pavel believes the reason is that payment habits are one of the most effective ways to retain users.
Whether it's the MetaMask Card paired with Linea or the Plasma Card linked to its own L1, these designs are all about keeping users within their ecosystem through everyday consumption, similar to Apple's strategy of building the iOS system with the iPhone.
Among them, Pavel's only positive example is EtherFi , which improves capital utilization efficiency by providing cash loans through cryptocurrency collateral, making it more innovative than other cards.
Does something have no value if it's not the final destination? Developer: Product iteration is the accumulation of innovation.
Gnosis Pay developer Ari Eiberman offered a somewhat reserved critique of Pavel, suggesting that while crypto debit cards may not be the final form of crypto payments, this doesn't mean they have no future.
Infrastructure iteration is not something that can be done overnight. Before merchants fully support on-chain payments, crypto financial cards are a realistic and necessary transitional solution.
He also pointed out that the commoditization of infrastructure (CaaS) is not a weakness of the industry, but rather a driving force for competition to move up the value chain, allowing real differentiation and innovation to be reflected in hosting models, revenue and efficiency, exchange rate transparency and consumer experience: "Of course, most crypto financial cards that lack substantial innovation will be eliminated in the bear market."
In summary, even though encrypted financial cards have not yet truly solved the core issues of payment friction, privacy, and global accessibility, they will undoubtedly play a key role in the iteration of future financial payment systems.
This article, "Are Cryptocurrency Financial Cards Just Working for Visa? Dissecting the Bottlenecks and Dilemmas of Crypto Payments," first appeared on ABMedia, a ABMedia .
