A customer is paying by card at a coffee specialty shop in downtown Seoul. /Courtesy of News1

The domestic card industry has begun serious preparations ahead of the introduction of stablecoins. Centered around the Korea Credit Finance Association, card companies have embarked on various preparatory measures, including joint research and proposals for legislative amendments, while global card companies have already entered the practical usage phase. The card companies are exploring survival strategies in response to the potential spread of stablecoins that could shake up the payment market.

According to the Korea Credit Finance Association on the 17th, the association is currently gathering opinions from card companies in preparation for the introduction of stablecoins. Based on this, the association plans to start with studies involving specialized card companies and, if necessary, form a task force (TF). Although the legal status and regulatory details of stablecoins have not yet been established, there is a consensus within the industry on the need to prepare in advance for the discussions underway.

Card companies affiliated with financial holding companies are applying for patents along with banks. Following Shinhan Card and KB Kookmin Card, which filed patents early, Woori Card applied for nine related trademarks on the 15th. The association also stated that it would propose a legal amendment to add stablecoin-related tasks as either concurrent or ancillary business items in the Specialized Credit Finance Business Act.

Card companies providing international payment networks are moving even faster. This is because non-bank corporations abroad have already started issuing and distributing stablecoins. Mastercard announced on the 14th that it plans to integrate the stablecoin FIUSD issued by U.S.-based PayServe into its products and services. PayServe is a global payment services company providing online and offline payment systems and services.

Through collaboration, Mastercard supports efficient and seamless fund conversion between fiat currency and FIUSD. This means that users will be able to use the Mastercard payment network with either FIUSD or fiat currency. Previously, Visa also collaborated with a U.S. stablecoin payment company (Bridge) to launch a stablecoin (USDC)-linked debit card.

MasterCard and Visa logos. /Courtesy of Yonhap News

The consensus is that the commercialization of stablecoins will change the landscape of the payment market. Once stablecoin payments are activated, consumers will be able to transact directly with store owners on a one-to-one basis, without going through card companies or electronic payment agents (PG companies) or value-added network (VAN companies). Since they would not have to pay fees to intermediaries, this will also benefit financial consumers. However, for the domestic card industry, which has seen reduced income due to lower merchant commission rates and regulations on card loans, this could be a clear negative factor.

However, the introduction and activation of stablecoins remain distant stories. In Korea, the legal status or regulations regarding virtual assets are not yet clarified, and retail stores will require wallets capable of accepting stablecoins for payment, which will inevitably take considerable time to build the infrastructure. Currently, in companies abroad that support virtual asset payments, consumers quickly convert prepaid virtual assets into fiat currency and settle payments through card networks.

A source in the card industry noted, "While each company has a high level of interest in stablecoins, it's difficult to prepare or respond immediately, so the association is gathering opinions for joint research," adding, "If the era of stablecoin payments arrives, it seems that there will be discussions on what roles card companies can play, or what services they can offer or partner with."

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