Tangem, a self-custody crypto wallet company, has launched a Visa-based physical crypto card for the first time, but said regions with strong demand for crypto cards do not match regions where card issuance is possible.

Cointelegraph, a blockchain media outlet, reported on Oct. 7 that Tangem expanded its self-custody payments service Tangem Pay to the Visa network and unveiled a physical card that can be used for in-store and online payments and ATM withdrawals.

The initial batch is limited to 5,000 cards. Users can top up the card directly from a self-custody wallet, and move funds back to the wallet if the card is suspended or cancelled. Tangem said the structure lets users access a payments network without handing asset custody to a third-party custodian.

Actual market demand and where the card can be supplied are diverging, it said. Tangem said more than 40 percent of Tangem Pay payments came from Latin America and more than 30 percent came from the United States. Even so, the physical card is restricted in some markets.

Andrey Ilinsky (안드레이 일린스키), head of Tangem Pay, said demand alone does not determine where the card is distributed. "It is not just a matter of where people want a crypto card," he said. "Demand, regulation, banking infrastructure and card issuance requirements have to line up, and right now those maps do not always overlap," he added.

Tangem said it cannot currently ship physical Tangem Pay cards to about 20 countries, including China, Russia, North Korea and Palestine. It also said such restrictions do not necessarily move in the same direction as regulation of cryptocurrency itself. Know-your-customer rules, sanctions, local banking rules and compliance requirements tied to card issuance determine where services can be offered, it said.

Tangem drew a line under the idea that self-custody removes every barrier. "Self-custody removes one major boundary in that there is no custodian between the user and the assets," the company said. "But once those assets enter a regulated payment network, another boundary emerges," it said. "The same conditions that lead people to seek crypto as alternative financial rails can make regulated card issuance more difficult," it added.

Tangem will also introduce rewards for payments. For eligible purchases, basic users will receive 1 percent back in Circle's USDC, while plus users will receive 2 percent. The first public unveiling of the physical card is expected to take place at Token2049 in Singapore.

The announcement shows crypto payments services moving beyond wallet functions to a stage of connecting to card networks. But the pace of adoption is likely to depend on how well national regulatory frameworks, banking infrastructure and card issuance requirements fit together, rather than on user demand alone.