Summary
- Shinhan Card said it would be desirable to use existing credit-card payment networks in the early stages to help expand stablecoin payments.
- It added that if users load stablecoins onto a card, they will be able to make payments at more than 3 million existing merchants, while merchants can also receive settlement in stablecoins easily through card companies.
- Shinhan Card said the market will evolve through a hybrid payment system that combines the strengths of stablecoins and credit cards, before moving to a 'multi-rail' model that uses several payment networks together.
Forecast Trend Report by Period
Shinhan Card said stablecoin payments may need to use existing credit-card networks in the early stages to gain wider adoption.
On Nov. 10, Namgoong Seol, a division head at Shinhan Card, made the remarks at a seminar titled “Challenges After the Digital Asset Basic Act,” held at the Financial Investment Education Institute of the Korea Financial Investment Association.
For stablecoins to circulate smoothly in payments at the outset, using existing card networks for part of the process would be a practical approach, he said.
While blockchain networks may eventually replace South Korea’s domestic payment infrastructure, it will be difficult for them to provide the full range of payment functions — including authorization, cancellations, refunds and settlement — in a short period, Namgoong said.
He added that if users load stablecoins onto a card, they will be able to make payments at more than 3 million existing merchants. Merchants would also be able to receive settlement in stablecoins easily through card companies.
Namgoong also said the market would ultimately move toward a system combining stablecoins with existing card networks.
Stablecoins and credit cards are not at odds, he said. The market will first move through a hybrid payment system that combines the strengths of both, before eventually evolving into a “multi-rail” model that uses several payment networks together.
Uk Jin
