The AI boom meets a new kind of crypto scam

The Economist

7 min read1 Oct 2026, 09:35 PM IST

Summary

Issuance of crypto-enabled credit and debit cards is surging. These cards connect crypto wallets to payment terminals used by ordinary businesses. They allow people in poor countries with unreliable currencies to transact in stablecoins pegged to sturdier foreign monies, notably the dollar.

VENTURE CAPITALISTS are pouring so much money into artificial intelligence that little is left over for anything else. Some, though, retain a soft spot for an earlier mania: cryptocurrency finance. In the first half of this year crypto startups received $10bn in venture capital (VC) through nearly 750 deals. Besides using lots of computing power, AI and crypto have had little in common. But an investigation by The Economist suggests the two are tightly linked by a booming illicit trade.

Issuance of crypto-enabled credit and debit cards is surging. These cards connect crypto wallets to payment terminals used by ordinary businesses. They allow people in poor countries with unreliable currencies to transact in stablecoins pegged to sturdier foreign monies, notably the dollar. But crypto cards have other big customers, too. Many card providers do not seriously try to verify the identity of their cardholders. That has left them open to abuse by criminals and sanctions evaders. They also let people in places like China buy subscriptions to American frontier AI models, circumventing the model-builders’ restrictions on sales to America’s enemies.

In the past couple of years regulators in America, Europe and Hong Kong have encouraged this growth by writing clearer rules for digital currencies. As a result, cryptocurrencies in general, and specifically stablecoins, have gained respectability. In particular, in an aggressive effort to capture a slice of the growing crypto economy, Visa and Mastercard have begun offering membership in their networks, hitherto mostly reserved for banks, to startup card-issuers with payments licences.