Two announcements on the same day illuminated the divergence of America’s crypto finance exceptionally clearly. On May 4, 2026, the SEC announced a delay in reviewing the first batch of prediction market ETFs, requiring applicants to further explain product mechanisms and information disclosure details; waiting at the door are traditional asset management institutions like Roundhill Investments, Bitwise Asset Management, and GraniteShares, which originally hoped to package event-driven crypto bets into compliant fund shells. The regulatory stance is labeled as a “temporary delay,” but with no subsequent timetable, this means discussions on new securitized products in the capital market have been put on hold.

On the same day, another piece of news rapidly circulated in the payment circle — Rain announced a partnership with Mastercard, planning to issue credit cards and prepaid cards that embed its on-chain settlement capabilities into traditional card networks. According to reports, Rain provides partners with authorization and settlement technology around on-chain accounted assets, which is one of its core business models, with the latest valuation around $1.95 billion, clearly indicating that the capital market has already priced this “payment infrastructure story.” On the securities regulatory track, prediction market ETFs were halted for re-examination; on the payment regulatory and commercial cooperation track, card organizations chose to test new technologies by connecting with infrastructure providers like Rain. This article aims to observe how the evolution of crypto finance in the U.S. along these two simultaneous threads occurring on May 4 began to progress at different speeds and forms.

Risk Anxiety Behind the Suspension of Prediction Market ETFs

For the prediction market ETFs under application, the core selling point is straightforward: packaging “betting on event outcomes,” which traditionally takes place on-chain or in gray areas, into fund shares that can be traded in brokerage accounts, allowing event outcomes to be “financialized.” Whether a certain policy is implemented, who will win a particular election, or whether a company’s quarterly earnings meet expectations, all are broken down into tradable result positions. It is precisely this design of directly transferring real-world uncertainties into capital markets that has prompted regulators to tighten their pace regarding legal attributes and risk assessments — it neither resembles traditional stocks or bonds with clear cash flow foundations, nor does it maintain a clear boundary with classic derivatives and betting activities. Before pressing the decision key, the SEC must first clarify what kind of product it is approving.

From the SEC's action on May 4 to delay the review of the first batch of prediction market ETFs and to require issuers to provide further explanations regarding product mechanisms and information disclosure, the regulatory anxiety's focal point has surfaced. On the one hand, the queue of institutions like Roundhill Investments, Bitwise Asset Management, and GraniteShares applying indicates that Wall Street has caught a whiff of commercial opportunities in event-driven products; on the other hand, the SEC is evidently asking a more fundamental question: what risk are ordinary investors taking when they purchase such ETFs in the secondary market, and how much information do they possess? Who defines the event itself, who provides and verifies the result data, and how does the ETF handle extreme situations like event cancellations or result disputes, all relate to whether information disclosure is sufficient and whether structural information asymmetry exists. Coupled with the potential for event outcomes to be influenced by public opinion, capital, or even individual large holders' actions, concerns over market manipulation naturally amplify, making the SEC's delay in review feel more like a “deep dive” risk assessment of the issuance plan details.

On the market level, interpretations of this delay are relatively restrained. Reports indicate that individuals generally view it as a temporary delay rather than a simple rejection signal; after all, regulators have not closed the door but rather sent the application materials back for further clarification. However, the SEC has given no clear subsequent review timetable or released clear approval standards, meaning that the compliance pathway for prediction market-related products remains shrouded in uncertainty: the queue of applicants is ready, and the narrative is compelling enough, but the height of the threshold and when the door will truly open are still in the regulators' hands.

Rain and Mastercard Advance On-Chain Card Settlement

On the very same day when the prediction market ETFs were “paused,” another story on a different track was rapidly advancing. Rain announced its collaboration with Mastercard to issue credit cards and prepaid cards, embedding its expertise in blockchain-based fiat pegged asset authorization and settlement technologies into the traditional card network. For the cooperating institutions, the front end remains the familiar cards and terminals, while the back end has been replaced with infrastructure capable of completing fund transfers and clearances on-chain. Rain plays the role of the invisible hand that embeds on-chain fund settlement capabilities into every card and every payment product.

The collaboration with Mastercard is not just about adding another card organization logo; it also signifies that on-chain settlement is systematically introduced into large-scale card scenarios for the first time: cardholders swipe their cards, merchants receive payments, and acquiring institutions account for transactions while keeping the entire traditional process unchanged as much as possible, while Rain is responsible for completing accounting and settlement on-chain in the background, then flowing back to the merchant’s familiar account system through the Mastercard network. Public information has not disclosed the specific launch time of the product, but from the cooperation direction, this is an experiment to connect on-chain settlement to the global payment network with minimal user-side friction.

More importantly, this cooperation transforms Rain’s identity within the traditional payment system. According to a single source report, prior to this, Rain’s card issuance primarily relied on the Visa network, but now coupled with Mastercard, the outside world begins to describe the company’s actions as “moving towards a dual card network layout.” For a company valued at approximately $1.95 billion in the on-chain payment infrastructure sector, integrating both Visa and Mastercard represents not just coverage in terms of business but also a ticket to gain clout: while the regulatory side is still hesitating about releasing new securities products, Rain has already woven itself into the backbone of the payment system through the “dual card network,” becoming one of the few infrastructure providers that can speak on both the crypto world and the traditional network.

Divergence of Regulatory Brakes and Commercial Accelerators

On the same day in 2026, May 4, the SEC pressed the pause button, announcing it would delay the review of the first batch of prediction market ETFs and requiring Roundhill, Bitwise, GraniteShares, and other applicants to supplement their explanations regarding product mechanisms and information disclosure; on the other hand, Rain and Mastercard publicly announced their cooperation to integrate Rain’s on-chain settlement technology into credit card and prepaid card systems. The capital market delivered a “postponement notice,” while the payment sector enjoyed a cooperation agreement; the timing was nearly coincident, yet it felt like two cars making completely opposing decisions at a crossroads: the regulatory agency hit the brakes, while the card organization pressed the accelerator.

This divergence reflects the structural differences between the two regulatory tracks. The prediction market ETFs are explicitly placed within the securities regulatory framework. The SEC faces the reality that once a product is listed, it may enter public investment portfolios, thus requiring prior answers concerning investor protection, market manipulation, information asymmetry, and even potential systemic risks. Any ambiguity in mechanism design may evolve into legal liability afterward. Because of this, market commentators generally view this postponement as prudence rather than rejection: in the gray area of new financial products, the SEC would rather take a step back than release products before the rules are clarified.

In contrast, the payment track taken by Rain and Mastercard reflects more commercial probing within the existing compliance framework. Rain provides partners with authorization and settlement technology based on on-chain pegged assets, while Mastercard opts to embed this capability within its card network through cooperation, maintaining control over compliance requirements while reserving a “testbed” for itself. Under this arrangement, risk is delineated at the specific business and cooperation agreement levels, viewed as controllable business innovation rather than financial reforms needing nationwide rules to be rewritten. This suggests that innovations related to crypto are likely to evolve along two distinctly different paths for securities and payments: on one side, capital market products repeatedly wait for approvals while submitting additional documentation; on the other, payment scenarios are rapidly iterated through cooperation between card organizations and infrastructure companies.

Different Betting Methods of Institutional Divergence

In the capital market track, asset management institutions like Roundhill, Bitwise, and GraniteShares are betting on the story of “packing uncertainty into fund shells.” They submit applications for prediction market ETFs to the SEC, hoping to rewrite results from elections, macro data, policy events, etc., into a type of “event-driven return” that institutional holders can possess under the existing compliance framework. From product structure to their prospectus, these issuers attempt to emphasize that they are merely packaging underlying event contracts into redeemable fund shares. However, on May 4, the SEC not only pressed the review pause button, but also required them to further explain their product operating mechanisms and information disclosure arrangements, essentially adding an added compliance checkpoint. For these fund companies, regulatory uncertainty means that research and development investments might be wasted over time, and their brand reputation must bear the scrutiny of whether they are “testing the boundaries.” Furthermore, if the first batch of products is deemed insufficient in information disclosure, future credibility in communicating with regulators may also be diminished.

Contrasting this is the betting method on the payment track. Rain chose to collaborate with Mastercard, embedding its on-chain authorization and settlement technology into credit and prepaid cards, utilizing on-chain assets pegged to the dollar for fund settlements, relying more on the global card network instead of the securities market. Reports indicate that before this, Rain’s card business primarily unfolded through the Visa network, and this collaboration is viewed as a move towards a “Visa + Mastercard” dual card network layout, allowing it to present growth stories of “transaction scale expansion” and “payment scene penetration,” rather than waiting for some ETF to ring the bell on the exchange. The $1.95 billion valuation of Rain is seen as pre-pricing for this on-chain settlement narrative. Compared to securities-type products that must confront high-sensitivity topics like investor protection and market manipulation, payment networks are more inclined to experiment within existing rules through cooperation, locking risks between specific issuers and technology providers; thus, while both are betting on crypto finance, asset management companies assume risks of changing regulatory stances and product pricing failures, whereas card organizations and infrastructure companies bear the risks of compliance boundaries and whether commercial implementation can succeed. This differentiation itself represents traditional finance's diverse bets on the same track.

Next Steps in the Game of Regulatory and Innovation

On the same timeline that day, the SEC pressed the “slow play button” on prediction market ETFs on May 4, requiring Roundhill, Bitwise, GraniteShares, and other applicants to continue supplementing product mechanisms and information disclosure, giving no clear timetable, and being widely interpreted as a precautionary assessment rather than outright rejection; on the other hand, Rain announced its partnership with Mastercard to connect its on-chain authorization and settlement technology to traditional card scenarios. The former indicates that event-driven products in the capital market are still locked before the regulatory gates, while the latter quietly advances under existing payment rules without disclosure of specific launch dates and pilot ranges. Supplemented by a valuation of approximately $1.95 billion and the reported transition from primarily relying on Visa to now moving towards a dual-network of Visa+Mastercard, Rain represents a payment infrastructure story making rapid strides within the compliance framework, while prediction market ETFs remain locked in a slower and more sensitive securities regulatory track.

In this asynchronous situation, the next steps can be broadly divided into two paths: one is to patiently await the SEC’s clarification on the risk list and acceptable boundaries regarding prediction market-type securities products through repeated inquiries; the other is to keep a close eye on the pilot progress of card organizations and on-chain infrastructures to see if these “innovations within the rules” will force regulators to re-discuss how to accommodate on-chain settlements within the payment system. For investors and builders, this is not merely a question of optimism or pessimism but a matter of strategic choice — some bet that the capital market stance will eventually loosen, while others choose to accumulate collaboration chips with traditional networks on the payment and infrastructure layers. In an uncertain regulatory environment, those who can simultaneously interpret the SEC’s nuanced signals and the commercial experiments of payment networks are more likely to gain the upper hand in this game.

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