Binance Payment Card Debuts In Argentina

August 9, 2022
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A new partnership between Mastercard and Binance enables Argentinians to purchase goods and services using cryptocurrencies, making Argentina the first Latin American country to offer this product.

A new partnership between Mastercard and Binance enables Argentinians to purchase goods and services using cryptocurrencies, as the companies look to tap into the growing demand for inflation-busting crypto products in the country.

Last week, Binance and Mastercard announced the rollout of Binance Card in Argentina to “bridge the gap between cryptocurrencies and everyday purchases”.

The prepaid crypto card enables Binance users to make purchases and pay their bills with cryptocurrencies, such as Bitcoin. The cards are issued by Latin American digital payments firm Credencial Payments and will enable cardholders to pay at more than 90m Mastercard merchants.

In practice, it means that customers can pay for their purchases in the cryptocurrency of their choice, while merchants receive the sum in fiat. The exchange takes place instantly at the time of the purchase.

Binance Card can be used both at the point of sale and for online purchases, and offers an 8 percent cashback for eligible purchases. In certain cases, it also enables no-cost ATMs cash withdrawals.

“Payments are one of the first and most obvious use cases for cryptocurrencies, although its adoption has a lot of room to grow,” said Maximiliano Hinz, Binance's general manager for Latin America.

“Binance Card is an important step in fostering greater crypto use and global adoption," Hinz said.

It will help “bring millions of additional users” to the crypto and digital asset space “in a safe and reliable way”, added Walter Pimenta, Mastercard’s Latin American EVP for products and innovation.

The product is in beta phase and will be widely available in the coming weeks.

Setting foot in Argentina

Binance Card is currently available only in EU member states, Iceland, Gibraltar, Liechtenstein and Norway, where it is offered as a traditional Visa debit card.

Argentina will be the first country in South America to enable Binance customers to use its crypto card, as it looks to zone in on a market that has had exceptional growth in the adoption of crypto in the country.

According to Chainalysis, Argentina is the tenth largest country globally in terms of crypto adoption and it is estimated that the stablecoin market has grown sixfold over the past year.

The large uptake comes amid concerns over continuous skyrocketing inflation. According to the government’s latest figures, the peso has lost 64 percent of its value over the past 12 months and central bank analysts estimate it may reach as high as 90.2 percent by the end of the year, according to Reuters.

Inflation, mistrust in banks and the small $200 cap on the monthly purchase of the US dollar have all contributed to Argentinians turning to cryptocurrencies in increasing numbers as a way to protect their savings.

It therefore comes as no surprise that a growing number of market participants are looking at ways to get into the arena and take advantage of this growing trend.

Alongside Binance, several local start-ups and fintechs have also launched a range of crypto payment cards.

In July 2021, Argentine start-up Lemon Cash became the first digital wallet to offer a crypto payment card as a result of a partnership with Visa. Lemon Cash offers a 2 percent cashback to its cardholders.

Lemon Cash was followed this February by Belo, which uses the Mastercard network and offers up to 21 percent cash back, and Satoshi Tango, one of the oldest crypto exchanges in Argentina, which started to roll out its Visa crypto cards in June.

However, it has not all been plain sailing for firms looking to launch new crypto services.

Earlier this year, Argentina’s largest private bank, Banco Galicia, and digital bank Brubank shelved plans to offer a streamlined one-stop-shop platform for crypto investments following intervention by the country’s central bank.

The central bank released a statement notifying financial entities that they are not allowed to carry out or facilitate their clients to carry out operations with crypto-assets that are not regulated by the country’s central bank. This led Banco Galicia to speculate that regulation of crypto-assets in Argentina was just a matter of time.

Speaking at the time, Marcos Zocaro, board member of local association Bitcoin Argentina, said the ban was “a blow to the mass adoption of these assets”, but given the economic context, “the adoption of cryptocurrencies in Argentina will surely continue to increase by leaps and bounds”.

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