KAST funds gap between 8-12% stablecoin rewards and 4% backing yield
The crypto card issuer covers losses to offer rewards exceeding the yield on reserve assets, as competitors reduce payouts.
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KAST, a stablecoin platform with Visa cards, pays 8% to 12% rewards while its backing assets earn 3.5% to 4%, covering the difference as a customer-acquisition cost.
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. The company 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 2026, led by QED Investors and Left Lane Capital. Pathy said the company has four to five years of runway.
Other issuers are reducing rewards. 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, 2026 for existing cardholders.
Krak, Kraken’s money app on the Mastercard network, has nearly 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 alone cannot sustain double-digit rewards. 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.