With the Rise in Cryptocurrency Value...Global Card Companies Push for Cryptocurrency Adoption

Goddess Finance Research Institute
'Global Card Brands' Plans to Adopt Cryptocurrency' Report

[Asia Economy Reporter Ki Ha-young] As interest in cryptocurrencies rises in the global financial market, major global card brands are considering financial services using cryptocurrencies.

According to the report "Global Card Brands' Cryptocurrency Adoption Plans" recently released by the Credit Finance Research Institute on the 27th, Visa disclosed its cryptocurrency-related business strategy in its Q1 earnings announcement this year and plans to support cryptocurrency cash-out and trading services with enhanced reliability and customer convenience on its payment network. Currently, Visa has partnerships with 35 cryptocurrency-related digital wallets and exchanges, including Crypto.com and Blofi.

It also plans to introduce stablecoins and central bank digital currencies (CBDCs), which are expected to be commercialized in the global commerce market, into its payment network. Visa aims to launch a corporate credit card usable at about 60 million merchants this year through a partnership with Circle, the issuer of the US dollar-pegged stablecoin (USDC).

Mastercard also announced on the 10th (local time) its plan to introduce cryptocurrencies into its payment network to allow cryptocurrencies to be used as a payment method at the point of sale. Having launched a debit card linked to the cryptocurrency platform Wirex last November, providing cryptocurrency purchase, holding, and exchange services, Mastercard is promoting the introduction of cryptocurrency-based payment services that omit currency exchange between fiat currencies. If direct payments at merchants without converting cryptocurrencies into regular currency units become possible, it is expected to reduce transaction costs and expand payment method choices for financial consumers.

However, it has been pointed out that security and stability must be ensured for cryptocurrencies to be used similarly to existing payment methods such as cash and cards within payment networks. In fact, Mastercard mentioned that compliance with four major guidelines, including financial consumer protection, must be judged beforehand. The guidelines include protecting financial consumers by strengthening security of personal and financial transaction information, customer verification procedures to prevent illegal transactions, strict compliance with jurisdictional laws and regulations in service areas, and securing social recognition as a stable payment method that can accommodate demand for goods and services purchases.

Choi Min-ji, senior researcher at the Credit Finance Research Institute, analyzed, "The influence of cryptocurrencies in the global payment market is expected to expand in the future," but added, "For full-scale cryptocurrency adoption, it is essential to secure security levels and stability equivalent to existing payment methods and to resolve uncertainties regarding the creation of actual payment demand."