The Future of American Express and Cryptocurrency
As the world of cryptocurrency evolves at lightning speed, many credit card holders are left wondering: will our trusty plastic cards ever be able to rack up Bitcoin instead of just cash back? According to Stephen Squeri, CEO of American Express, don’t hold your breath. While the future may include some form of crypto redemption, the immediate answer is a resounding no when it comes to issuing a crypto-linked card.
Stablecoins and the Pursuit of Digital Currency
Interestingly, Squeri mentioned that American Express is already exploring the use of cards for stablecoins—those friendly digital currencies that aim to maintain a stable value. This is a key area of exploration for the company, as they monitor potential developments in central bank digital currencies (CBDCs). In essence, while mainstream cryptocurrencies like Bitcoin might resemble shiny, volatile assets like gold, they haven’t yet found their way into the payment services that credit cards offer.
Card Benefits or Crypto Pitfalls?
Squeri isn’t just tossing out a vague sense of “maybe one day.” He pointedly highlighted the differences between traditional credit card benefits and what cryptocurrency can currently provide:
- No consumer protections: With credit cards, you’ve got dispute rights; with crypto? Not so much.
- Rewards program void: Love earning points for that free flight? It’s harder to earn those with digital assets.
- Credit extension: Credit cards extend buying power; cryptocurrencies do not.
He concluded that the fundamental values that come with credit cards don’t lend themselves well to cryptocurrencies—yet.
Business Models in the Crypto Space
While American Express sits back and evaluates its course of action, competitors like Visa and Mastercard are digging into the crypto scene with gusto. For instance, in January 2021, Gemini rolled out its own crypto credit card, allowing users to earn up to 3% back in Bitcoin. Meanwhile, BlockFi partnered with Visa to offer cardholders a juicy 1.5% back in BTC.
A Global Trend Beyond the U.S.
And it’s not just Americans who might reap the benefits of crypto spending. In December, Mastercard announced a plan to launch a crypto-linked payment card across the Asia-Pacific region. This innovative card will allow users to seamlessly convert their digital assets into fiat currency, showcasing that the appetite for crypto-linked benefits is on the rise, regardless of geographic boundaries.
Final Thoughts
So, while American Express may be taking its sweet time to join the world of cryptocurrencies, it’s clear that the credit card landscape is changing. Consumers remain curious to see how their rewards programs and payment transactions will adapt to this increasingly digital economy. In short, keep your eyes peeled, but maybe skip that crypto card dream for now.
