A card-linked stablecoin is a stablecoin balance connected to a debit or credit card that enables everyday consumer spending at merchants worldwide. These cards allow users to spend stablecoins like USDC, USDT, or DAI anywhere traditional payment networks such as Visa or Mastercard are accepted.
How Card-Linked Stablecoins Work
Card-linked stablecoin systems connect a user's stablecoin wallet to a payment card issued through traditional card networks. When a purchase is made, the system automatically converts stablecoins to local fiat currency to complete the transaction.
The typical transaction flow includes:
- User tops up or links their stablecoin wallet to the card
- User makes a purchase at any merchant accepting Visa or Mastercard
- The card issuer receives the authorization request and converts stablecoins to fiat
- The transaction is approved and processed through standard payment rails
- Settlement occurs via traditional banking infrastructure
This process happens instantly at the point of sale, allowing seamless spending without manual conversion.
Types of Card-Linked Stablecoin Products
- Debit Cards: Funds are deducted directly from the linked stablecoin balance at the time of purchase. Users must maintain sufficient balance to complete transactions.
- Credit Cards: Users receive a credit line backed by stablecoin deposits or other crypto collateral, paying off balances at the end of each billing cycle.
- Prepaid Cards: Cards are preloaded with a fixed stablecoin amount, offering controlled spending without linking to a larger wallet balance.
Examples in Practice
Several providers offer card-linked stablecoin products:
- Gnosis Pay allows spending directly from self-custodial wallets
- KAST Card supports USDC, USDT, and other stablecoins globally
- MetaMask Card enables spending from non-custodial holdings
- Bybit Card links to exchange-held stablecoin balances
Risks and Considerations
Card-linked stablecoins introduce specific considerations:
- Conversion fees when stablecoins are exchanged for local currency
- Custodial risk if funds are held by a third-party issuer
- Tax implications as spending may trigger taxable events
- Geographic restrictions limiting availability in certain jurisdictions
- Foreign transaction fees for cross-border purchases
Users should review fee structures and custody arrangements before selecting a provider.
Summary
A card-linked stablecoin enables holders to spend their stablecoin balance through traditional payment card networks. By automatically converting stablecoins to fiat at the point of sale, these cards provide practical utility for everyday transactions while allowing users to maintain their assets in digital form until spent.
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