KAST pays 8% to 12% on stablecoin reserves while the backing assets earn about 4%, funding the gap itself
Crypto card issuers are buying customers with rewards that outrun the yield on the money behind them, and some are now cutting back.
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KAST, a stablecoin platform that issues Visa cards, advertises 8% to 12% rewards on its Reserve account depending on membership tier, while the assets backing those balances earn 3.5% to 4%, CoinDesk reported on November 1, 2026. KAST covers the difference.
“Previously we were nearly break even. Now we’re loss-making,” CEO Raagulan Pathy said. He described the gap as a customer-acquisition cost: “You take a loss on acquiring the customer at the beginning, but then you sell them more and more features.”
KAST raised $80 million in March, led by QED Investors and Left Lane Capital, and Pathy said it has four to five years of runway.
Other issuers are pulling rewards back. Bleap, which issues a Mastercard card, moved from 2% cashback to a 1% base rate with higher category rewards. Eduards Timofejevs, CEO of Bleap Latvia, said customers who only spend and collect cashback can be unprofitable. Bybit EU replaced non-VIP cashback tiers of 2% to 10% with an uncapped 1%, effective August 4 for existing cardholders.
Krak, Kraken’s money app on the Mastercard network, is approaching 200,000 cardholders, who average about 8.3 card payments a week. Ether.fi’s Cash card ties cashback, starting at 3%, to staking and DeFi vaults.
Card fees cannot carry double-digit rewards on their own. European Union rules cap interchange at 0.2% on covered consumer debit transactions. In the United States, debit transactions exempt from the federal cap averaged 1.21% of purchase value in 2024, according to Federal Reserve data.