Cryptocurrency

FOR IMMEDIATE RELEASE: 12th July 2018

Cryptocurrencies are traditionally perceived as investment avenues for quick and high returns, and mostly been limited to trading purposes. However, as they continue to gain considerable ground in Asia-Pacific (APAC), several companies are now looking to leverage the high user base and explore the other possible use-cases, says leading data and analytics company GlobalData.

Reportedly, Japan and South Korea are among the top three markets globally, along with the US, for cryptocurrency trades. As of January 2018, nearly one third of global bitcoin transactions were made with Japanese Yen and South Korea accounted for around 35% of global Ethereum trading.

Sowmya Kulkarni, Payments Analyst at GlobalData, says: “The gradual rise in cryptocurrency acceptance at merchant locations can be seen as an upcoming trend in the region, with merchants increasingly opting for this method of payment due to benefits such as lower transaction fees, no chargebacks, and cheaper payment acceptance from foreign tourists.”

Large merchants such as Bic Camera and Yamada Denki in Japan and Goto Mall in South Korea are now accepting payments with cryptocurrencies, which is likely to push many more peers to look at accepting cryptocurrency payments.

Most recently in March 2018, Bithumb – a cryptocurrency exchange in South Korea – partnered with Korea Pay Services to enable 6,000 retail outlets across South Korea to accept cryptocurrency payments. Earlier in April 2017, Coincheck – a cryptocurrency exchange in Japan – partnered with Recruit Lifestyle to roll out its bitcoin-enabled POS app AirREGI across 260,000 merchant stores in Japan.

The continued development of the cryptocurrency market has attracted considerable interest from regulators in Japan, Australia and South Korea. The new regulatory initiatives are expected to provide a much-needed push to widen the use-case of cryptocurrencies.

“Cryptocurrency has traditionally been a topic of discussion for its volatility and authenticity, with several industry experts not reckoning it as an alternative to traditional payment tools. This perception is changing with a large number of merchants and consumers in the region now gradually embracing it as a payment tool. Lower transaction charges compared to traditional card-based payments could make cryptocurrencies a preferred choice among merchants.

“In addition, merchants can also avoid costly chargebacks as purchases through cryptocurrencies are one-way and irreversible in nature. Customers also stand to benefit from cryptocurrency transactions in the form of potential pricing benefits from merchants, higher security, and easy borderless payments. This form of payments is now becoming increasingly popular among tourists, as they don’t attract foreign exchange charges,” concludes Sowmya.

ENDS

For more information:

Analysts available for comment. Please contact the GlobalData Press Office:

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 The Bank of Montreal (BMO) is the latest Canadian bank to restrict its retail customers from making cryptocurrency transactions.  In a decision first reported on reddit in late March and confirmed last week in a statement to CoinDesk, BMO has blocked all cryptocurrency merchant transactions processed through its MasterCard credit cards (business and personal), debit cards, and Interac Online Payment.  

The decision follows a move by the Toronto-Dominion Bank (TD Bank), which announced in late February that it would be restricting its customers from using the bank’s credit cards to purchase cryptocurrency.  It remains unclear whether other Canadian banks will follow suit. In a statement made to The Globe and Mail, the Royal Bank of Canada (RBC) cautioned customers that drops in the value of purchased cryptocurrencies may expose clients to higher levels of debt than they are able to repay.  The Bank of Nova Scotia (BNS, Scotiabank) also advised that it was currently in the process of reviewing its policy on cryptocurrency transactions.

With Canadian Banks Targeting Cryptocurrency Transactions – Users Turn to Alternatives

As financial institutions consider restricting cryptocurrency transactions, Canadian seeking to exchange cryptocurrency are increasingly exploring alternative solutions, such as turning to peer-to-peer solutions including Local Bitcoins and Cancoin.  Where available, Bitcoin and other cryptocurrency “ATMs” are also an option.  Cryptocurrency ATMs are also known as “automatic exchangers”.  Unlike traditional ATMs, they do not connect directly to a user’s financial institution or the Interac service.  The ATMs work by converting deposited bills into cryptocurrency (usually Bitcoin), deducting transfer fees, and moving the remaining cryptocurrency into a specified wallet.   While cryptocurrency ATMs allow users to exchange cash for cryptocurrency, and in some cases, exchange cryptocurrency for cash, most ATMs only provide services in Bitcoin and transfer fees can vary.

Some Canadians are also moving their retail banking accounts to co-operative financial services providers, including local credit unions (or caisses populaires in French).  Credit unions are primarily regulated at the provincial level and may or may not have crypto-friendly policies and practices.  However, even if your financial institution or local credit union permits cryptocurrency transactions, risk-conscious consumers should be aware that if the funds are held in a currency other than CAD, deposit insurance protections may not apply.