[Hands-on] Paying at cafes and convenience stores with coins… testing a ‘coin card’ firsthand

Hands-on with a coin card

Real-time coin-to-cash conversion mechanism

Tap the terminal and payment goes through instantly

Runs on Visa and Mastercard rails

Korean financial industry steps up its response

I recently heard that coin cards that let users pay with digital assets can now be used in Korea as well. Not only stablecoins pegged to fiat currencies, but also major digital assets such as Bitcoin (BTC), Ethereum (ETH) and Solana (SOL) can be used for payments.

I decided to try a coin card myself. On the recommendation of an industry source, I issued a Visa card linked to a global neobank project called ‘TRIA (TRIA)’ for about $20. After downloading the app and completing the Know Your Customer (KYC) process, a virtual card was issued immediately. I then deposited Solana worth about $125 into TRIA’s digital wallet and loaded it onto the virtual card.

There were limitations in use. The card could not be added to Samsung Pay, which I use. Checking further, the TRIA card was available only on Apple Pay and Google Pay at present. Fortunately, I was able to add it to Google Pay, which I had used during a business trip.

After visiting a Starbucks store in Seoul’s Gangnam District and launching the Google Pay app, I held my phone near the payment terminal and the transaction went through right away. While this varied depending on the terminal environment, the coin card could be used at most merchants that support Apple Pay (including convenience stores and cafes).

Leveraging Visa and Mastercard payment networks

Digital assets are spreading beyond being a mere investment vehicle into the real economy. It has been confirmed that coin cards launched through partnerships between global payment networks such as Visa and Mastercard and blockchain infrastructure companies can be used at many merchants in Korea.

Coin cards are a payment method in which a card is connected to a digital-asset wallet based on blockchain technology. The structure converts a user’s digital assets into fiat currency for payment.

The payment itself is processed through the existing Visa and Mastercard card rails. In the process of cashing out digital assets, a blockchain-based ‘Real-time On/Off ramp’ function is used.

Market expansion is also rapid. Global digital-asset exchanges such as Crypto.com, Bybit and Coinbase have already launched a range of coin cards, while projects including TRIA as well as Cypher, KAST, Ether.fi (ETHFI) and READY are rolling out card services in succession.

According to Dune Analytics, the global total payment volume of coin cards stood at $102.24 million as of February (about KRW 150 billion). That is roughly a fivefold surge from a year earlier.

Advantages include low fees and global usability

In talking to actual users, the reasons for using coin cards were clear.

The biggest reason is the ‘usability of held assets.’ Most digital-asset investors must sell their holdings on an exchange, convert them into Korean won, and then withdraw the funds in order to use the assets. This process can entail verification procedures and fee burdens.

By contrast, coin cards can reduce this process because users can use their digital assets for payments immediately simply by depositing them into a card-dedicated account.

An industry source in Korea’s digital-asset sector, identified only as A, said: “I hold quite a lot of digital assets for investment purposes,” adding, “I used to have to convert digital assets into Korean won every time to pay my card bill, but I started using a coin card because it lets me skip that process.”

Low fees and global usability are also cited as advantages. With traditional overseas cards, multiple intermediaries often participate in the payment process, which can drive up fees. Coin cards, by contrast, are seen as securing cost competitiveness by simplifying the settlement structure.

For this reason, coin card usage is already spreading among industry professionals who travel overseas frequently. Another industry source, identified only as B, said: “If Apple Pay is available even abroad, you can pay with a coin card,” adding, “I pay for everything from hotel stays to meals with a coin card without needing to exchange currency separately.”

In addition, 4.5–10% cashback—higher than typical debit cards—and airdrop points paid based on performance are cited as advantages of coin cards.

FSS: “Hard to regulate under current law”… concerns over reverse discrimination

Because most coin cards are issued overseas, they are not included in Korea’s licensing framework for financial authorities. Authorities have also stated that it is not easy to regulate them directly under current laws and regulations, because if an overseas operator provides services without establishing a domestic branch, it does not fall under supervisory jurisdiction.

Although the service is nominally aimed at overseas users, as in the reporter’s case, domestic users can also easily issue and use a card through a mobile application.

An industry source explained: “On the surface, it looks like digital assets are used directly for payments, but in reality, at the point of payment the operator purchases the user’s digital assets and provides fiat currency, after which the payment proceeds,” adding, “It is effectively the same as domestic users using an overseas-issued card.”

Still, concerns have been raised that this structure could lead to ‘reverse discrimination’ against domestic card companies. Cho Jae-woo, an associate professor at Hansung University, said: “Overseas digital-asset operators are using card rails to target the Korean market,” adding, “With institutionalization delayed, domestic players are in a situation where it is difficult to respond.”

He added: “For domestic card companies to offer the same service to Korean customers, it may be necessary to obtain a domestic Virtual Asset Service Provider (VASP) license.”

Korean financial industry also moves to respond

Korea’s financial industry is also moving into payment businesses that leverage digital assets. The strategy is interpreted as an effort to build digital-asset-based payment infrastructure and secure market competitiveness.

Hana Financial Group earlier this month announced a service targeting foreign customers in partnership with Circle, the issuer of USDC, and the exchange Crypto.com. The model provides certain benefits when users top up a Crypto.com prepaid card with USDC and use it at domestic merchants.

Fintech companies are also entering related businesses. Danal recently said it will launch next month a digital-asset payment service for foreign visitors to Korea in cooperation with Binance Pay, a digital-asset payment platform, and Circle. The service is expected to be applied first to the prepaid card ‘KONDA.’

Moves at the card-industry level are also continuing. The Credit Finance Association of Korea in January launched the ‘Stablecoin Phase 2 Task Force (TF)’ and prepared a draft of integrated guidelines for card companies. More recently, it said it plans to conduct a three-month ‘Stablecoin card-rail payment technology proof of concept (PoC)’ starting next month in cooperation with Lambda256, a subsidiary of Dunamu.