Stablecoin cards allow customers to spend digital dollars through familiar cash registers. As transaction volumes increase, factors such as issuers, custodian service providers, exchange services, and settlement arrangements come into play. These factors determine the costs, as well as what happens when there are issues with a purchase.

• As shown on the dashboard on November 3rd by Paymentscan, the card transaction volume tracked in October was approximately 1.37 billion US dollars, which includes some self-reported data.
• Its KAST series recorded $121 million through 31 blockchain transactions in October.
• Visa stated in the September update that there are now over 160 stablecoin-linked card projects that have been launched.
• The agreement between Marqeta on October 16th and Coinbase covers hosting, exchange, and settlement services.
• Visa and Lloyds settled $750,000 during a 7-day stablecoin pilot program announced on September 30th.

As payment companies integrate digital dollar balances into existing card networks, the total value of stablecoin card transactions tracked in October has reached approximately $1.37 billion.

The dashboard of Paymentscan displayed the monthly data on November 3rd, which also showed approximately 12.94 million tracked transactions and 363,321 active addresses. Its coverage combines on-chain observations with some off-chain data provided by issuers, and users can also exclude this data by setting it up separately.

What customers see on their mobile phones or terminals is an approval for a card payment. Behind that purchase, stablecoins may be held, exchanged, pledged, or used to settle obligations between financial institutions.

Merchants can still receive payments in fiat currency through their existing service providers. Whether stablecoins improve the customer experience depends on the funding pathways, total costs, and the arrangements for recovering funds in case of payment failures or disputes.

The total amount of stablecoins measures different stages of payment.

The method of Paymentscan separates recharges from consumption. Depositing assets into a card account does not necessarily mean a purchase has been completed: this money may still remain unused, or it could be transferred out through a bank transfer, or withdrawn on the blockchain.

Its consumption view will use payment, clearing, or settlement data based on the project architecture. Some service providers settle purchases individually on the blockchain; others process them in batches, so a single blockchain transaction may represent payments from many customers.

This dashboard also defines users as active addresses, rather than verified individuals. If a person uses multiple addresses, they may be counted multiple times; whereas a single aggregated address could represent the activities of many people.

These differences are particularly evident in the KAST series. The October report shows $121 million, 31 transactions, and 4 active addresses; the method used to identify these is the issuer's settlement flow.

Dividing $121 million by 31 results in an average of about $3.9 million per observable on-chain transaction. This is the average value of the settlement records; treating it as the average price paid by customers would misinterpret this measurement.

Similarly, dividing the same trading volume by 4 addresses results in $30.25 million per address. This does not prove that only 4 people used these cards, nor does it prove that each customer spent that amount.

Therefore, a growth chart can show the expansion of activities, but it cannot provide information on the number of retail customers or the distribution of purchases. To obtain this data, one would need the purchase records for each individual transaction, or customer data defined separately by the service provider.

This difference can affect comparisons between different projects. A service that records each purchase on the chain individually may generate millions of events; whereas another may settle a similar volume of transactions in just a few dozen batches.

Paymentscan indicates that it will not include the traffic from issuers along with the projects that use these issuers in the same chart. The named projects are separated from the remaining issuer activities to reduce double counting.

Another boundary is the coverage range of the blockchain. If a project switches to a different settlement network, the reported proportion on one chain may change, yet the amount consumed by customers remains the same.

In the comparison between October and November, the reporting period is also important. November 3rd only covers a portion of the month, so its rolling total should not be compared to the full month of October as if they cover the same number of days.

Merchants usually collect payments through the card network.

Visa explains stablecoin-linked cards as a product where digital wallets are integrated into their payment networks. Consumers can use their encrypted assets without the need for each merchant to integrate new wallets or directly accept underlying tokens.

This arrangement separates the assets used for payment from the methods by which merchants accept payments. Stores that display their card network identifiers do not need to hold USDC, manage private keys, or agree to directly accept tokens just because customers use stablecoin-funded cards.

The authorization request is transmitted to the card-issuing party through the merchant's payment service provider and the card network. The card issuer will first check the account and transaction rules before deciding to approve or reject the purchase.

The agreement between Marqeta and Coinbase on October 16 describes a version of such infrastructure. Coinbase will provide hosting, fiat-to-crypto exchange services for enterprise customers' stablecoins, as well as settlement on Base.

Therefore, the consumer brand, the card-issuing platform, and the encryption infrastructure provider can be different companies. The names displayed in the application are not necessarily the entities that hold stablecoins or perform exchanges.

When customers recharge their cards using USDC, they may come into contact with multiple ledgers during a single purchase process. The application records the available balance, the card issuer records the authorization, and the settlement records show the flow of funds between the companies that have completed the payment.

Each record has its purpose. The approval from the terminal means that the card issuer has authorized this deduction; however, this does not imply that the merchant has received the stablecoin transfer, nor does it mean that each settlement obligation has been fulfilled.

The expansion of Rain illustrates how this infrastructure serves multiple brands and networks. Its agreement with Mastercard is an extension based on the existing Visa business foundation and includes card issuance and stablecoin settlement services.

Therefore, projects that use Rain can provide a branded consumer experience while relying on general infrastructure at the underlying level. Comparing two application names does not necessarily mean comparing two independent settlement systems.

When problems arise, the division of responsibilities becomes quite clear. Customer service may need to distinguish between situations such as missing blockchain deposits, denied card authorizations, or refunds from merchants that have not yet been credited to the account.

Cards can be used with existing balance or by borrowing funds.

"Stablecoin cards" describe the source of value, but they do not refer to a single legal or technical product. Prepaid balances, wallet arrangements similar to debit cards, and secured credit accounts can all provide a similar checkout experience.

The card announcement for MetaMask describes a self-managed mode: the assets remain in the user's wallet before purchase. The wallet and its permissions are part of the payment arrangement, rather than being pre-recharged into the exchange balance.

Its earlier launched metal card projects involved Mastercard, Baanx, and CompoSecure. The design mentioned in the announcement uses smart contracts to verify and process payments from wallet assets.

However, the scope of self-hosting still needs to be considered in conjunction with spending permissions. Customers may retain their wallet keys while authorizing a contract to access specified assets in card transactions.

This is different from transferring stablecoins to a custodial application and then obtaining an internal dollar balance. In the custodial version, customers rely on service providers and their partners to maintain and return that balance in accordance with their terms.

Guaranteed credit arrangements introduce another layer of distinction. The protocol Avalanche Card US describes purchases supported by collateral, as well as under what circumstances Rain Liquidity allows for the liquidation of collateral to fulfill obligations.

Its disclosure terms include payment cycles and collateral valuation arrangements. Therefore, what users see may be purchasing power supported by pledged assets, rather than simply transferring these assets to merchants with each card transaction.

When the value of collateral can change, the source of repayment becomes very important. Payment accounts supported by US dollar-stabilized coins and those supported by volatile assets carry different price risks, even though they use the same network at the point of sale.

The card fund description for Peanut provides another example of an arrangement based on Rain. It distinguishes between card network authorization and collateral withdrawal, and describes a dedicated contract that grants both user and Rain permissions.

This architecture allows for different timing points for the expenditure process and access to collateral. The immediate authorization for merchants does not mean that all changes to the underlying assets are traditional wallet transfers initiated by the customer at that moment.

It is impossible to determine which version the customer is using based solely on the product name. The account agreement needs to specify who holds the assets, what fees can be deducted, how repayments are made, and under what conditions withdrawals can be restricted.

A purchase of $100 can incur a variety of different costs.

Stablecoin transfer fees are just a part of the bill. Card accounts may also involve exchange rate differences, foreign exchange fees, cash withdrawal fees, membership fees, as well as reward conditions.

As previously reported by crypto.news, the launch of the commercial account by KAST combines fiat accounts, stablecoin funds, cards, and local payments. The rewards and profits advertised depend on the specific products, while regulated services are provided through partners.

When customers compare different options, they need to consider the fees applicable to their currency and jurisdiction. Even for transactions in US dollars within the same project, the cost-effectiveness of free US dollar transactions versus purchases in foreign currencies can vary.

For example, assuming a foreign currency purchase equivalent to $100, with a cashback rate of 1.5% and a foreign exchange fee of 1.75%, the cashback amount is $1.50, and the fee is $1.75. Before considering any other fees or exchange rate differences, the net cost is $0.25.

If the assumed foreign exchange fee for the same transaction is only 0.5%, then the net reward becomes $1. The reason for the change in conclusion is that the actual fee has changed, not because the rebate ratio advertised has changed.

The impact of fixed fees on small payments varies. A fee of $0.10 accounts for 1% of a purchase of $10, but only 0.1% of a purchase of $100.

Therefore, frequent small-value consumption items may have different actual costs compared to occasional large-value payments. Applying a uniform percentage across the entire monthly bill may overlook such differences.

Cash withdrawals require separate calculation. Assuming a fixed fee of $3 and a proportional fee of 2% for withdrawing $200, the cost would be $7 before considering local ATM fees or foreign exchange costs, which is equivalent to 3.5% of the withdrawal amount.

These are just examples and not quotes for any specific customer. The purpose is to illustrate the input items required before comparing the total costs of two cards.

The currency selected by the terminal also introduces another decision point. According to the guidelines on dynamic currency conversion (.Visa), merchants or ATM may offer the option to convert the amount into the cardholder's local currency, along with the applicable exchange rate and additional fees.

This quote comes from a part of the payment chain that differs from the publicly stated exchange terms of the card itself. Choosing it may result in a different exchange rate being applied, even though the card promotes low-cost foreign currency consumption.

The balance of US dollar stablecoins does not determine whether a customer should accept a certain conversion option on the terminal. What really needs to be compared is the disclosed conversion scheme with the card product's own process, including the applicable fees.

Member pricing has introduced another denominator. The annual fee of $1,000 amounts to about $83.33 per month; to offset this fee through an additional 0.5 percentage point in cashback, one would need to spend approximately $16,667 per month to qualify, and this doesn't even take into account any limits or other benefits.

This calculation assumes that all consumption meets the criteria, and that the rewards remain unchanged. The project's consumption limits, exclusions, reward currencies, and exchange restrictions may prevent customers from achieving the returns advertised.

The card issuer still needs funds between approval and settlement.

Visa The financing account for September outlined a less obvious requirement: card-related projects must provide funds for settlement obligations before receiving all the payments from the cardholders. Even projects based on stablecoins still need working capital during this period.

The company described a Credit Coop financing tool used by Rain. The settlement information from this tool is used for fund arrangement, while the incoming receivables are used for repayment. Borrowing and repayment activities are part of financial infrastructure operations and are separate from the retail purchase volumes of customers.

This arrangement explains why blockchain settlement can be both fast and yet rely on credit. The rapid transfer and settlement of assets do not eliminate the time difference between when obligations are due and when the project receives funds.

One can imagine a simplified scenario: at the settlement point, a project owes $10 million, yet only $8 million of the client's funds are immediately available for use. In this case, the project would need to allocate $2 million from its own liquidity or from agreed-upon sources of funding in order to cover the shortfall on time.

If the $2 million only arrives the next day, it will not retrospectively cancel the financial arrangements required on the first day. For the card issuer, the issue is whether they can finance this time difference reliably at an acceptable cost.

Stablecoins can change the timing of capital flows. Bank transfers, which are limited by business hours, differ from blockchain transfers that can be made on weekends; however, the recipient still needs to accept and reconcile this payment regardless.

Visa and Lloyds settled $750,000 in obligations within 7 days during their September pilot, with the funds arriving at Visa within an hour, including on weekends. Both companies clearly described this test as the settlement work behind the payment experience.

This amount is merely the total of the pilot project and does not prove that all card activities related to Lloyds have been migrated to stablecoins. Its purpose is to demonstrate the designated transfer and reconciliation processes under real-world conditions.

As early as April, Visa expanded its settlement pilot to 9 blockchains. The annualized settlement throughput of $7 billion reported at that time referred to the activities among participating institutions, rather than the total amount of purchases funded by stablecoins.

The annualized operating rate is an extrapolation of the current speed over a full year. It should not be presented as the total transaction volume for a complete year, nor should it be added to the monthly card consumption without checking for any overlapping activities.

Refunds must be returned through payment arrangements.

Stablecoin transfers and card cancellations follow different rules. Transactions that have been confirmed on the blockchain will not be canceled just because a merchant cancels an order; payment service providers must handle the corresponding changes through card arrangements.

The card status description for OKX distinguishes between cancellations before settlement and refunds after settlement. Pending authorizations may result in the freezing of funds, even if the purchase has not been completed yet.

For customers, what seems like a disappeared balance may actually be an authorized freeze, a settled deduction, or a refund that is still in process. The status determines which party needs to take action and what records should be kept.

This is not unfamiliar in traditional bank cards, but encrypted financial accounts present an additional issue: what kind of asset is actually being returned. The original deposit, the currency used for purchases, and the account credit may not all use the same unit of account.

For example, a user may deposit US dollar tokens but pay a merchant in euros. If a refund occurs later, the applicable exchange rules will determine how the account is credited; the initial deposit in stablecoins alone cannot answer this question.

Even when merchants return the same amount in euros, exchange rate fluctuations can still result in differences in the dollar value of debits and credits. Whether such differences apply and whether the original fees are refunded depend on the terms of the project.

The transaction lifecycle documentation for Interlace distinguishes between authorization, clearing, and settlement records. Its model explains why the customer service team needs the card reference number and status, rather than just a blockchain transaction hash.

Hashing can prove that the deposit has reached the designated address, but it does not necessarily indicate whether the merchant has initiated the final deduction, whether the authorization has been cancelled, or whether a refund has been initiated through the card network.

The developer notes for Web3Card also describe the process from terminal authorization to on-chain settlement, and record refunds as a separate stage. Users' applications must re-account these events to reflect in their displayed balances.

Disputes are different from ordinary refund requests made to merchants. The card agreement determines the complaint process, evidence requirements, and time limits; the finality of blockchain cannot replace this process.

Therefore, the comparisons related to bank debit cards are practical: who accepts complaints, which transactions qualify, what time limits apply, and where the refunded amounts are credited. A familiar card network identifier does not mean that the terms and conditions for each cryptocurrency account are the same.

Global acceptance does not mean that everyone can open an account.

The coverage of the card network describes where qualified cards can be accepted. The eligibility to issue the card, on the other hand, determines who can obtain it, which depends on the country in which the project is located, as well as identity verification and regulatory permits.

The announcement on October 15th, StraitsX, extended its card issuance capability to over 100 markets, but at the same time, it was made clear that the project is still subject to regulatory and compliance requirements, as well as Visa requirements. This is an announcement regarding infrastructure capabilities, and not an unconditional offer to issue cards to every resident in these markets.

When service providers compare the large number of merchants with the number of countries, this distinction may be obscured. A card that can be accepted by millions of merchants may still only be issued to customers who meet narrower criteria.

Companies can also launch products in phases through partnerships. A new market may require different card-issuing entities, terms, or funding arrangements, even if the application and brand remain unchanged.

The launch of Stablecard on Western Union reflects this clear approach: in August, it was announced that it would be available in 37 markets, with plans for further expansion. The product, supported by USDPT, connects the value of remittances to Visa cards through Rain.

The initial 37 markets are merely a historical list of markets that were launched; they do not represent the exact number of markets available today. Before customers rely on this card for receiving payments or making purchases, they still need to confirm the current product's eligibility and terms.

The product update for MetaMask also indicates that in addition to issuing announcements, it is necessary to check the current status as well. On June 3rd, it was noted on that page that registration in the United States had been temporarily suspended, despite previous announcements that it would be available nationwide.

A product may still be usable for some existing customers, but new applicants face a suspension. Therefore, the applicant's status, issuance date, and country of residence will all affect the answer to the question of "whether this card is available."

Exposure to stablecoins does not equate to exposure to the financial accounts built around them. On-chain transfers may be permissionless, but card issuers may still require identity verification, screen transactions, and restrict certain users or regions.

Therefore, even if the blockchain is running normally, identity and account checks can still affect the consumption process. Customers need to know whether unused assets can be withdrawn, and what procedures should be followed if card access is suspended.

Card statements may not necessarily contain complete tax records.

The assets used for funding payments may already have a tax history before entering the card account. The bills that record merchant deductions may not include the original acquisition cost, transfers between wallets, or the local currency value required for tax declarations.

The U.S. Internal Revenue Service (IRS) guidelines on digital assets include stablecoins within the framework for reporting digital assets, and classify payments for goods or services as one of the related transactions. It requires the retention of sufficient records to support the position in federal tax filings.

The administrative issues here are separate from whether a particular payment generates taxable income. While the value of US dollar tokens may always be close to $1, the tax calculations for customers still depend on the rules regarding acquisition, disposal, and applicable tax regulations.

For example, a customer may receive stablecoin compensation for their work, hold it for a period of time, and then spend a portion of it using a card. The acquisition of income and the subsequent use of that asset are two different events in the transaction history.

Another customer might use their existing savings to buy the same tokens and spend them immediately. Even if the merchant's deductions are exactly the same, it is not possible for the previous records of these two customers to become identical.

The guidelines for the disposal of crypto assets issued by Her Majesty’s Revenue and Customs (HMRC) in the UK list the purchase of goods and services with tokens as one of the disposal activities that may result in capital gains. The record-keeping requirements include information on the tokens, date, quantity, value in pounds sterling, and related costs.

These are merely examples of guidelines from two judicial jurisdictions and are not universal tax laws applicable to all cardholders. The specific handling will depend on the place of residence, the transactions, and any special rules that apply to that asset.

The reason why this distinction is important is that the convenience provided by the checkout counter does not determine how much work is required to organize the records afterwards. Service providers can make consumption easier, but customers still need to aggregate information from exchanges, wallets, and card statements.

When actually exporting records, it is necessary to specify the assets and amounts deducted, timestamps, exchanges and fees, the currency of the merchant, as well as whether there were any cancellations or refunds afterward. Corresponding these records with historical data is an independent task; one cannot simply rely on whether the monthly total amount on the card is correct.

If a project converts deposits into internal fiat currency balances before any purchase occurs, then the conversion and subsequent merchant payments may be two separate events. Simplifying the entire process as merely spending stablecoins may obscure the actual location where the cryptographic assets are disposed of.

Reward records may also need to be categorized separately. Token rewards, credits only for accounts that make future purchases, and cash rebates are all different types of benefits, even though applications often group them under the “rebate” heading.

The percentages mentioned in card promotions cannot determine the tax treatment of these benefits. The truly relevant evidence is the reward terms, as well as records of what customers actually receive.

Next, what is worth paying attention to is duplicate consumption and total cost.

The business logic of stablecoin cards lies in their ability to reduce the steps that customers would otherwise need to complete on their own. Those who receive payments in digital dollars may be able to consume directly without having to sell their coins on an exchange separately and wait for a bank transfer.

Visa describes that such products are very popular in some markets because customers desire to obtain the value of dollars and international purchasing power. The business role is clear: products funded by stablecoins have introduced such activities into their card networks.

On the contrary, the question is whether this convenience is still worth it after taking into account all costs and conditions. Paying a slightly lower fee on-chain does not necessarily mean that customers obtain a better overall exchange rate or a cheaper way to withdraw cash.

A meaningful comparison should involve the same amount of money going through both paths completely. If one path starts with USDC and ultimately results in local currency consumption, then the other path must also include selling USDC, withdrawing fiat currency, and completing the equivalent payment costs.

If customers already hold the local currency in their bank accounts, the comparison would be different. Having to purchase stablecoins specifically to top up the card adds an extra step that stablecoin holders who already possess them do not need.

This is also why the same product may be useful for one customer but unnecessarily expensive for another. The starting assets, target currency, payment amount, and frequency all determine the calculation results.

Public growth data does not indicate how much consumption will continue to exist without incentives. To prove customer retention, it is necessary to observe over time and consistently measure changes in rewards and eligibility criteria.

Useful disclosures should include: the number of active cardholders defined on a per-person basis, a separation of purchase frequencies from settlements, the reuse rate, and the proportion of activities that result in temporary rewards. The total transaction volume of the issuer cannot provide all of these answers.

The concentration of service providers should also be taken into consideration in comparisons. The growth of a network may rely heavily on a single project, while multiple consumer brands may use the same card issuer, liquidity tool, or hosting service provider.

The table from KAST provides a concrete example to illustrate why event counting is important: Paymentscan records $121 million in transactions in October, which came from 31 on-chain transactions, among which issuer settlements are one of the tracked activity types.

Content worth noting

• Consistent consumption data: Separate monthly purchases from top-ups, settlement records, and settlement batches.
• Customer retention: Whether customers will continue to use the service repeatedly after changes to the introductory rewards or cashback terms.
• Actual fees: Currency-related fees, exchange rate spreads, and annual fees applicable to qualified customers.
• Refund processing: Where the returned value is credited, and how long it takes to resolve freezes, cancellations, and disputes.
• Real-time availability: Countries where cards are issued, status of account opening and registration suspensions, as well as regulated partners that provide services for various projects.

Frequently Asked Questions

How many stablecoin card promotions were recorded in October?

As shown on the dashboard on November 3rd by Paymentscan, their October consumption amounted to approximately $1.37 billion. This total includes some off-chain information provided by issuers and depends on the selected coverage settings.

Will stablecoin cards be used to pay for shops with cryptocurrencies?

Not necessarily. Many products use stablecoins to fund purchases, while merchants still receive payments in the legal tender of their regular card networks.

Why has KAST only recorded 31 transactions in October?

Paymentscan tracks the settlement of the project's issuer, so each observable transaction may represent the sum of multiple purchases. This is not the quantity of each individual retail transaction.

Are all stablecoin cards self-hosted?

No. The products include managed balances, wallet-based consumption, and credit arrangements supported by collateral, each with its own set of permissions and repayment rules.

Will foreign exchange fees exceed the rebate?

Yes. Taking a payment of $100 as an example, the foreign exchange fee of 1.75% would be $0.25 higher than the reward of 1.5%, and this does not even include other costs.

Does the annualized settlement figure equal the annual consumption?

No. The operating rate is an extrapolation of the current settlement activity speed, while annual consumption measures the purchases completed throughout the year.

Can every resident in the advertisement apply?

No. Card acceptance, card issuance capabilities, and customer qualifications are different indicators, each of which is subject to jurisdictional and compliance requirements.

Will the finality of blockchain prevent card refunds?

No. Card refunds are independent payment and accounting events that are processed according to project arrangements. This article is for educational purposes only and does not constitute investment advice.