Binance announced a partnership with Mastercard this week to launch a prepaid card in Brazil, the second initiative of its kind in Latin America after a previous rollout in Argentina.
The card, which is still in beta, will soon be available to all existing Binance users with a national ID. Brazilian clients will thus be able to pay for goods and services with 13 different cryptocurrencies.
This includes online and in-store transactions so the merchant can collect payment through Mastercard. Binance’s card transactions that use cryptocurrency will bear a 0.9% fee, while purchases in Brazilian reais should be free of charge, the company said in a statement.
Binance’s decision is the latest illustration of the crypto industry’s efforts to expand its reach into the real-world economy. The backdrop of falling prices has led companies to explore other use cases for the technology beyond investments. As such, payments gradually emerge in Latin America as one of the substantial opportunities for crypto.
A relevant market for Binance Card
“Brazil is an extremely relevant market for Binance, and we will continue to invest in new services for local users, as well as contribute to the development of the blockchain and crypto ecosystem in the country,” said Guilherme Nazar, General Manager at Binance for Brazil, in a statement. “Payments is one of the first and most obvious use cases for crypto,” he said. “Yet adoption has a lot of room to grow.”
The card, issued by banking-as-a-service firm Dock, should be available “in the next few weeks,” the company said. The executive underscored Brazilian “openness to innovation” as one of the reasons for Binance to roll out the product in the country.
Cryptocurrency cards can bridge crypto holdings with the real-world economy. They have already been introduced by several companies in 2021. Through crypto cards, users can pay in any store without the merchant noticing that the buyer used virtual assets. The way it works, the user’s cryptocurrencies are converted to fiat currency in real-time at the point of purchase.
To encourage its adoption, the Binance card includes up to 8% cashback in crypto on certain purchases, which it did not specify in the press release.
A bridge between traditional finance and crypto
According to Nazar, Binance’s country, the product will “expand the interconnection between traditional finance and crypto” in Brazil.
The release cited a Mastercard study showing strong interest from Brazilians in emerging technology. The 2022 Mastercard New Payments Index found that 49% of Brazilian consumers had done at least one crypto-related transaction in the previous year, above a global average of 41%.
“Brazilians are eager to embrace crypto beyond an investment asset,” Marcelo Tangioni, Mastercard Country Manager, said.
The 14 different currencies available include the Real, bitcoin, ether, Santos fan token (a Brazilian soccer club), stablecoins such as BUSD or USDT, and many others.
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Binance plans to expand its prepaid card product to “new markets worldwide.”