Crypto Cards Aren’t The Future, But Onchain Credit Is

Opinion by: Vikram Arun, co-founder and CEO of Superform
Crypto cards aren’t the future of payments. They’re a temporary interface for a world that hasn’t fully accepted cryptocurrencies.
They rely on banks as issuers, Visa or Mastercard as gatekeepers, and compliance rules that look exactly like TradFi.
In most cases, crypto is sold into idle USD, the assets stop earning and every swipe creates a taxable event.
That’s not innovation. That’s a debit card with extra steps.
As digital banks built with blockchain rails scale, crypto cards that behave like debit cards will become obsolete, replaced by systems that treat cards as a thin interface on top of robust onchain credit.
The problem with current crypto cards
To understand why this shift is necessary, consider what happens with current crypto cards. When systems force users to liquidate holdings to spend, they reinforce the paradigm crypto was meant to escape: the false choice between liquidity and ownership.
Debit-style crypto cards recreate this same trade-off because they require assets to become spendable balances, which halts yield and makes the system structurally negative-sum without subsidies.
The IRS treats converting cryptocurrency to fiat currency as a taxable disposal, meaning each coffee purchase triggers capital gains reporting and permanently removes assets from productive use. Card issuers typically earn 1% to 3%, plus a flat fee per transaction, from interchange fees. The infrastructure looks decentralized on the surface, but the dependencies run deep.
Onchain credit fixes these issues
Instead of selling assets to spend, onchain credit enables people to deposit yield-bearing assets, open a credit line and spend against it. When people swipe the card, their debt increases, but their assets keep earning. Nothing is sold unless the person fails to repay. If the position falls below governance-defined parameters, liquidation is deterministic and transparent. This shift toward wallet-native credit shows onchain credit moving from concept to practice.
In this model, spending doesn’t reduce ownership; it increases debt. Collateral continues to compound until the credit line is repaid or liquidated. There are no forced conversions and no idle balances. Yield-bearing stablecoins currently offer about 5% yield, and DeFi protocols range from 5% to 12%, depending on demand and token incentives.
Users holding these assets in credit accounts keep earning while maintaining spending power.
Any earning asset can be collateral
This shift from debit to credit fundamentally changes what’s possible. Once credit becomes the primary primitive, the question stops being