Shinhan Card Says Stablecoin Payments May Initially Use Existing Card Networks

Shinhan Card said stablecoin payments may need to use existing credit-card payment networks in the early stages to encourage wider adoption.

Namgoong Seol, a division head at Shinhan Card, made the remarks on November 10 at a seminar titled “Tasks After the Digital Asset Basic Act,” held at the Korea Financial Investment Association’s Financial Investment Education Institute.

“For stablecoins to circulate smoothly in the payments sector at the outset, it would be desirable to use existing card networks to some extent,” Namgoong said.

He said blockchain networks may be able to replace domestic payment infrastructure in South Korea, but would struggle to quickly provide the full range of payment functions, including authorization, cancellations, refunds and settlement.

If users load stablecoins onto a card, they would be able to make payments at more than 3 million existing merchants, he added. Merchants would also be able to receive settlement in stablecoins easily through card companies.

Namgoong also said he expects a system combining stablecoins and existing card networks to emerge over time. “Stablecoins and credit cards are not at opposite ends,” he said. “After moving through a hybrid payment system that combines the strengths of both, the market will ultimately evolve into a multi-rail model that uses several payment networks together.”