Afterpay pitches for stablecoins and crypto in submission to Australian Senate
Afterpay, the buy-now-pay-later giant from Australia that was recently acquired by Square, has given submission to the Australian Senate for ‘making Australia a technology and financial center’ in which it has proposed the use of stablecoins and crypto to cut down merchant fees.
This is the first indication from the company that shows its inclination towards the crypto ecosystem and it has said that cryptos could be a way to reduce the use and dependence on cards which could in turn help to cut down the network costs as the fees would then be shared between the payer and the receiver and the merchants would no longer need to shoulder the burden.
“Afterpay does not currently offer crypto-related products but we are actively considering how innovative features could be a part of the financial management ecosystem we are building,” it said. “Our customers expect us to evolve with their needs and aspirations, whether or not they meet traditional definitions of financial products and services.”
This assumes further significance as this is the first time that the company has directly challenged the business model of the card companies. The BNPL product is already seen as a competition to the traditional card business as they also allow purchase amounts to be split into 3 or 4 and no fees are charged for the same and the companies make their revenue by depending on the late fees and also on defaulters as well. Afterpay also goes one step further in suggesting that the government and the RBA could look into a framework for an AUD-backed stablecoin which the RBA could push to its population and this would help in the adoption of crypto in the mainstream as well.
As a company, it does make sense for Afterpay to pitch for the use of crypto as it has been acquired by Square which processes crypto payments and so they would be viewing the increased use of crypto as a chance to build and diversify their business as well. It is now up to the regulators to take a call on the increased adoption of crypto and how they would be able to bring in regulations to control the flow of such cryptos within the financial ecosystem. Regulators around the world have been busy with this task over the last few months as they have realized that crypto is here to stay and it would be easier to regulate and control them rather than give them up altogether. installments
