At 13,000 Locations, Korea’s Largest Convenience Store Chain Will Accept Crypto
CU, the largest convenience store chain in South Korea with over 13,000 locations, will soon accept crypto.
According to local reports and the statement of Terra’s co-founder Do Kwon, CU will integrate a payment system called Chai, which enables consumers to utilize a Korean won-backed stablecoin called Terra to transact.
The stablecoin CU plans to accept is a major KRW stablecoin invested by Binance, OKEx, Huobi, Polychain, Dunamu (company invested by Kakao that runs UPbit), Arrington XRP Capital, and more.
BGF Retail, the parent company of CU, and Chai entered into a strategic partnership earlier this week that would allow consumers to use a barcode from the Chai mobile app to purchase products using crypto.
Could other crypto assets be integrated in the future?
Do Kwon, the co-founder of Terra, said that for businesses with low margins like convenience stores, without a full system in place, it is difficult to accept volatile currencies like bitcoin.
“Bitcoin adds volatility cost to settlements, which doesn’t work well with low margin biz like convenience stores. Will just be Terra for now!,” he said.
In major regions like Japan wherein large retailers are accepting cryptocurrencies like bitcoin, businesses strike a deal with exchanges to automatically convert any crypto payments to fiat.
Rakuten, for instance, acquired a bitcoin exchange in 2018 reportedly to integrate a system to accept crypto payments and operate a spot exchange.
In August, as CCN reported, Rakuten said:
“Rakuten Wallet, Inc., a consolidated subsidiary of Rakuten Group and operator of a crypto asset (virtual currency) exchange business, announced that today it has launched a spot trading service for crypto assets in which users can conduct spot trading of crypto assets through a dedicated smartphone app.”
For now, as said by Kwon, at least in the foreseeable future, it is unlikely for large-scale low-margin businesses to accept major cryptocurrencies unless a system that makes the process seamless emerges and is widely accepted by businesses in South Korea.
Han Chang-joon, the president of Chai Corporation, said in a statement translated by CCN:
“Moving forward, Chai will continue to lessen the burden on franchises and increase the merit of consumers through partnerships with various companies like CU convenience store with an on and offline infrastructure.”
Currently, consumers can utilize crypto to transact at major platforms in the likes of Yanolja for hotel bookings, Bugs for music streaming, and TMON for online services.
Retail adoption is important
Since early 2018, the adoption of crypto assets by retailers has struggled to meet the expectations of users and investors, specifically because high profile dealers were in the works.
Possibly due to a lack of regulatory clarity and a high level of volatility in the crypto market, many of the highly anticipated retail deals have fallen out in the past 12 to 16 months.
While the usage of crypto-assets at offline locations such as CU is likely to only account for a small fraction of all payments given the wide utilization of existing payment systems like credit cards, growing adoption could further solidify the image of cryptocurrencies as an asset class.