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The amount of discussion right now about stablecoin-linked cards and interchange fees really stands out to me, because it reveals how little parts of crypto understand the incentive mechanisms behind money.

The same people who will go 12 to 20 pages deep into a stablecoin whitepaper about tokenomics and cryptoeconomics will look at interchange and call it rent-seeking.

Why? Because a merchant might pay something like 2% to 3% to accept a card transaction, which seems expensive, and people assume Visa or Mastercard is taking most of it.

But that's not how it works.

That 2% to 3% is the total cost of accepting the payment. It is spread across the issuer, the card network and the merchant's processor or acquirer. The card networks themselves only take a small fraction of that. Most of the economics sit elsewhere in the system, particularly with the issuer through interchange.

And why does the issuer get that revenue? Because there is a whole lot of fraud, and there are a lot of things that can go wrong with a transaction.

Sometimes you buy something and the goods don't show up. Sometimes they're damaged. Sometimes they get lost in the mail. Sometimes your card details get stolen. All kinds of things can go wrong, and consumers expect somebody to do something about it.

In crypto, the attitude is sometimes that you sent the money, and that's the transaction. Live and let live, be your own bank, etc.

But crypto isn't built for most people, and most people want something quite different.

They want those consumer protections. They want to know that if something goes wrong, there is a process for fixing it. And if you give them that, they're much happier to use the product.

That is why stablecoin-linked cards have taken off. They're absolutely overpowered as a form factor.

I see the logo. I tap the card. It works. That's what consumers want. So why wouldn't we give it to them?

Now, some of the pushback is that this is all surface-level stuff. What about what's going on underneath it?

Well, Rain just put out a blog post that makes the case rather nicely.

Historically, a stablecoin-linked card still had many of the same settlement challenges as any other card. Authorization happens in seconds. The actual money movement happens later.

And if you're a relatively new issuer, that creates a very real working-capital problem.

Rain gives the example of a card program doing $1 million of spending every day. Going into a long weekend, that issuer could need $4 million sitting there ready for settlement because the banking rails don't move the money until Tuesday. Scale that to $10 million or $100 million of daily spend and you're talking about a lot of idle capital.

This is where stablecoins actually change something underneath the card.

Rain now settles card transactions with Visa daily using stablecoins, including weekends and holidays. So rather than carrying several days of settlement obligations over a weekend, the issuer can settle every day. Rain says that can reduce collateral requirements by up to 60%.

That isn't "instant settlement", and I don't think we need to pretend that it is. It's better than that argument. It takes a three or four-day liquidity problem and turns it into a daily settlement process.

The consumer doesn't notice any of this. They still tap the card. The merchant still accepts the same card. The fraud controls, disputes and consumer protections are still there.

But the company providing that card can potentially run it with a lot less idle capital.

The pushback then becomes: "Well, banks can already settle amongst each other 24/7. The G-SIBs can do this themselves. They're a cartel and they're not going to give it up."

Guess what? There are more people involved in payments than the largest banks in the world.

There are smaller issuers. Fintechs. Remittance companies. Crypto businesses. Global platforms. Companies that don't have JPMorgan's balance sheet and don't want to build correspondent banking relationships market by market just to launch a card.

If you confuse the market as having one set of incentives because the biggest banks can build everything themselves, you frankly miss the point.

And if you treat doing this onchain, but not on Ethereum, or not in the most decentralized way imaginable, as some kind of religious transgression, you also miss the point.

Rain's new Agentic Payments Alliance takes the same argument one step further. Rain has brought together more than 25 companies, including Visa, Mastercard, Fiserv, Circle, Solana and Remitly, to work on things like agent identity, authorization and standards for agents spending money on somebody else's behalf.

An agent spending your money needs the same things a cardholder does. Permission. Limits. Fraud controls. Authorization. And somewhere to spend.

Again, you don't have to throw the existing system away. Stablecoins can increasingly do the settlement underneath. Cards can remain an incredibly useful acceptance and control layer on top.

It is not rent-seeking to provide consumers with something they want. It is not rent-seeking to build the best product.

It is value-added. It is doing something useful.

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