Current State: $1.5B Monthly Volume but 30-Year-Old Tech Stack
According to Tiger Research's latest report, crypto payment cards now process $1.5 billion per month, demonstrating strong demand to spend digital assets through traditional card rails. However, these cards still depend on the clearing networks built by Visa and Mastercard in the 1990s. Transactions essentially convert crypto into fiat via centralized custodians before completion, with nearly zero on-chain settlement or real-time clearing capability.
Bottlenecks: Old Rails Cannot Support Next-Gen Finance
Current crypto card models suffer from three structural issues. First, multi-layered fund flows: users must deposit crypto into compliant custody accounts, then pass through issuer, card network, acquirer, and other intermediaries for a single purchase — resulting in high fees and slow settlement. Second, compliance friction: anti-money laundering (AML) and know-your-customer (KYC) requirements vary by jurisdiction, and card networks' risk models for crypto remain stuck in traditional frameworks. Third, lack of programmability: card spending cannot tap into DeFi yields, automatic currency conversion, or conditional payments, making these cards essentially 'fiat cards with a crypto flavor' rather than true crypto payments.
Future Direction: Universal Financial Infrastructure
Tiger Research argues that the next step for crypto payment cards is to break out of the traditional card network 'walled garden' and build a new infrastructure based on stablecoins, Layer2, instant settlement, and decentralized identity (DID). Specifically, this includes migrating clearing on-chain, using zk-rollups for real-time zero-knowledge compliance verification, and allowing users to settle directly with crypto assets or stablecoins without fiat conversion. Only when crypto payment cards no longer depend on 1990s-era technology can they truly become everyday financial infrastructure for the masses.