By Gerelyn Terzo on Tuesday 31 January 2023
Crypto adoption has taken off in South America.
Crypto is moving further into the mainstream, at least in South America. Leading cryptocurrency exchange Binance has teamed up with card giant Mastercard to launch a prepaid crypto card in Brazil. The new card will support over a dozen currencies, including the Brazilian real, bitcoin and BNB, the latter of which is Binance’s native coin.
Binance Card, as it’s called, will be issued by Dock and will give Binance users in Brazil the chance to buy goods and services plus pay their bills with cryptocurrencies. The new card will be accepted by 90m Mastercard merchants globally, including brick-and-mortar stores and e-commerce businesses.
Payments are one of bitcoin’s two primary use cases, the other one of which is a store of value. It’s still early days for crypto payments, and bitcoin market prices remain volatile. However, the card is designed so that a consumer’s crypto will be converted to fiat money in real-time at the till. So, merchants won’t have to worry about waiting around for the sale to be completed on the blockchain. US Rep French Hill, chair of a new digital assets subcommittee, recently made reference to the slow nature of bitcoin payments.
JUST IN 🇺🇸 Chair of the new Digital Assets Committee: Sending #bitcoin "takes so long my coffee gets cold. It's not ready for payments."— Bitcoin Magazine (@BitcoinMagazine) January 26, 2023
We are so early... pic.twitter.com/zPSBui1htA
Binance’s targeting of Latin America’s biggest economy is no coincidence. In 2021, Brazilians pumped more than $4bn into the cryptocurrency markets, representing over three times more than their allocations to the US stock market, based on estimates.
Late last year, former Brazil President Jair Bolsonaro signed a bill legalizing cryptocurrency payments in the country. Unlike El Salvador, Brazil stops short of making bitcoin legal tender. Brazil’s law provides regulatory oversight of the cryptocurrency industry, including licensing standards for digital asset service providers and penalties including jail time for fraud.
“Brazil is an extremely relevant market for Binance and we will continue to invest in new services for local users, as well as contributing to the development of the blockchain and crypto ecosystem in the country,” said Guilherme Nazar, General Manager at Binance for Brazil, in a statement.
Mastercard’s country manager for Brazil, Marcelo Tangioni, said, “Brazilians are eager to embrace crypto beyond an investment asset. Today is an exciting step in our crypto journey, which draws on the strengths of both our trusted global network and Binance’s infrastructure to support consumer choice in payments.”
Among the perks is an 8 per cent cashback feature, paid in crypto, on certain transactions and zero-fee ATM withdrawals. However, there’s a 0.9 per cent conversion fee on crypto payments. With the product, Binance is expanding the product’s Latin American footprint, as the card was introduced in Argentina last year. The new card is currently in beta format in Brazil and will see a wider rollout in the coming weeks.
Incidentally, Brazil and Argentina are also reportedly planning a common currency of their own, potentially resulting in the world’s second-biggest currency bloc, behind the euro.
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