Unlock the power of crypto payments for your wallet

🏦 Central Bank Digital Currencies (CBDCs) and Regulatory Moves

• Philippines Completes Wholesale CBDC Testing: The Philippines central bank concludes a wholesale CBDC test aimed at streamlining fund transfers. This initiative reflects Southeast Asia's growing interest in digital monetary systems for efficiency and financial inclusion. Read more.
• ECB Progress on Digital Euro: The European Central Bank releases its second report on the Digital Euro project, focusing on privacy, usability, and potential for retail payments. The report underscores the EU's cautious yet deliberate approach to CBDC development. Read more.
• Central Bankers Question CBDC Value: A new survey reveals waning enthusiasm for CBDCs among central bankers, despite ongoing research and pilots. Key concerns include unclear demand and risks of centralization in digital financial ecosystems. Read more.

🌍 Global Policy and Crackdowns

• Diem Stablecoin Project a "Political Kill": David Marcus, the famous former Facebook executive claims the Diem (formerly Libra) stablecoin project was thwarted by political and regulatory resistance, emphasizing the challenges tech giants face in entering financial sectors. Read more.
• Coinbase Exec Predicts Stablecoin Regulations by 2025: A Coinbase executive foresees regulatory clarity for stablecoins within two years, suggesting it could coincide with potential political changes, including a Trump presidency. This timeline highlights the growing importance of stablecoin policy. Read more.
• Cambodia Blocks Binance and Coinbase in Crypto Crackdown: Cambodia's government restricts access to major crypto platforms, citing concerns over financial stability and regulatory gaps. This move signals the nation's conservative stance on crypto markets. Read more.
• FDIC Urged Pause on Crypto Activities: Documents obtained via Coinbase's lawsuit reveal that the FDIC requested banks to halt crypto-related activities. This regulatory pressure underscores growing scrutiny of crypto's integration into traditional finance. Read more.

📈 Innovations in Stablecoin

• Programmable Yield Stablecoin Model: This article highlights a novel stablecoin framework offering programmable yield functionality, allowing enhanced financial tools in decentralized finance (DeFi). The model aims to balance security and flexibility, potentially unlocking new avenues for stablecoin adoption. Read more.
• Noble Launches Stablecoin on Cosmos Using Cryptodollar Infrastructure: Noble, a Cosmos-based protocol, launches a custom stablecoin backed by M^0 infrastructure. This initiative focuses on interoperability and decentralization, leveraging the scalability and ecosystem of Cosmos. Read more.

🚀 Ecosystem Growth and Opportunities

• Chainalysis Highlights Web3 Opportunities: Chainalysis explores Web3's growth potential in gaming, DeFi, and creator economies. The report emphasizes untapped opportunities for innovation in these segments, driven by blockchain adoption. Read more.
• Nuvei Expands Blockchain Payments in Latam: Payment provider Nuvei unveils a blockchain solution supporting stablecoin payments across Latin America. This initiative aims to bridge gaps in financial infrastructure while boosting crypto adoption in the region. Read more.
• dtcpay Plans Shift to Stablecoins by 2025: The crypto payments firm dtcpay announces plans to prioritize stablecoin transactions by 2025, phasing out Bitcoin and Ethereum. The strategy aligns with market demand for lower volatility in crypto payments. Read more.

🔒 Privacy and Cross-Chain Solutions

• Namada Launches Privacy-Focused Cosmos Layer 1: Namada, a privacy-centric blockchain on Cosmos, officially launches its mainnet with a native token. This Layer 1 project emphasizes enhancing transactional privacy while integrating with Cosmos' ecosystem. Read more.
• Ethereum-Compatible Cross-Chain Payments with Safe: Safe introduces a Visa-like payment system enabling cross-chain crypto transactions. Its focus on interoperability and speed positions it as a critical infrastructure for decentralized payments. Read more.

🏦 Stablecoins and Tokenization

• BlackRock-Backed Stablecoin Gains Traction: Projects like Ethena and Securitize are leveraging BlackRock’s involvement to pitch tokenized stablecoin solutions, aiming for a $1 billion market. Read more.
• Standard Chartered Predicts Stablecoin Growth: A report predicts stablecoins could account for up to 10% of U.S. M2 and foreign exchange transactions, highlighting growing institutional interest. Read more.
• Tether Ends Support for Euro Stablecoin: Tether has discontinued its EURt stablecoin, citing compliance challenges with Europe’s MiCAR regulations. Read more.
• Schuman Financial Launches Euro Stablecoin: A MiCAR-compliant euro stablecoin, Europ, has been introduced to enable secure and regulated digital euro transactions. Read more.

🌍 Global Regulatory Developments

• UK to Unveil Crypto Regulations in 2025: The UK plans to implement comprehensive crypto and stablecoin regulations by early 2025. This move aligns with its ambition to be a global crypto hub while addressing risks tied to digital assets. Read more.
• Brazilian Bitcoin Reserve Proposal: A Brazilian lawmaker has introduced a bill to establish a national Bitcoin reserve to mitigate economic risks. The initiative aims to position Brazil as a leader in crypto adoption. Read more.
• China’s AML Law Highlights Crypto Focus: China’s Supreme Procuratorate has underscored cryptocurrency-related anti-money laundering (AML) priorities in its latest legislation, signaling a tougher stance on illicit crypto use. Read more.
• Taiwan Tightens Crypto AML Rules: Taiwan has strengthened anti-money laundering measures following violations by a local exchange. The updated rules aim to enhance compliance and protect users. Read more.
• Morocco Plans to Lift Crypto Ban: Morocco is drafting regulations to end its crypto ban, signaling a shift toward embracing digital assets with a clear regulatory framework. Read more.

📈 Crypto Adoption and Market Trends

• India Explores CBDCs and Payments: India is examining the use of central bank digital currencies (CBDCs) for cross-border payments to enhance financial inclusion and efficiency. Read more.
• UK Crypto Ownership Reaches 7 Million: Over 7 million UK adults now own cryptocurrencies, reflecting growing mainstream adoption, according to the Financial Conduct Authority. Read more.
• Crypto Gains Aid Mortgage Approvals: Rising crypto investments are enabling lower-income households to secure mortgages, as digital asset gains boost financial stability. Read more.

🔄 Institutional Moves and Partnerships

• Ripple’s Tokenized Fund Launch: Ripple and Archax have launched the first tokenized money market fund on the XRP Ledger, marking a milestone in institutional crypto products. Read more.
• Partior Secures $80M in Funding: Blockchain-based payments platform Partior raised $80 million from Deutsche Bank and other backers to expand global operations. Read more.
• Robinhood Adds USDC in EU Markets: Robinhood has expanded its crypto offerings by enabling USDC trading in European markets, bolstering its global strategy. Read more.

🏛️ Legal and Policy Developments

• Chinese Court Bans Crypto for Wages: A Chinese court has ruled against using cryptocurrency for wage payments, citing its legal tender policies. Read more.
• Russia’s Digital Ruble Transition Period: Russia’s Ministry of Industry proposes a two-year phase-in period for its digital ruble adoption, aiming to minimize disruptions. Read more.

🚀 Emerging Projects and Innovations

• Coinbase Won't Support Celo Migration: Coinbase announced its decision not to support Celo’s migration to a Layer 2 solution, triggering a lot of emotion from the Ethereum and Celo community. Read more.
• Suriname Candidate Promotes Bitcoin: A Suriname presidential candidate has pledged to adopt Bitcoin as the national currency if elected, signaling progressive views on crypto. Read more.
• Indonesia’s Crypto Surge: Indonesia reported over $30 billion in crypto transactions in 2024, supported by 21 million traders, underscoring rapid adoption. Read more.

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What is the interchange fee?

You go into Starbucks and order. “That’ll be $7.89,” the cashier says. (Inflation!) You tap your card, the payment is authorized, and a minute later you’re sipping your latte.

It was convenient, fast, and Starbucks was happy you paid with a card and moved along rather than fumbling in your pocket for change. But the convenience of that card payment also costs Starbucks money, a little piece of the transaction that goes to the companies making the payment system work smoothly. One key part of that cost is called the interchange fee.

The interchange fee varies heavily depending on a variety of factors: the country in which the transaction takes place, the kind of merchant where a purchase is made (online vs. in person), whether or not it is a cross-border transaction, the type of card used (debit vs. credit, for example), and more. At Kulipa, we see that the average interchange fees on consumer purchases amount to:

• 0.2% in Europe
• 1.5% in Latin America, Africa, Asia, and the Middle East
• 2.0% in USA

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In money terms, that means the interchange fees would be:

• €0.20 on €100 in France
• R$1.50 on R$100 in Brazil
• $2.00 on $100 in New York

Who shares the interchange fees?

Interchange fees are divided among the different players in the transaction – with the exception of Mastercard or Visa, who have a different role that we’ll get into below.

Card issuers take the largest part of the pie in exchange for coordinating the activity among all these players. If the transaction’s card issuer has a BIN sponsor, that sponsor is also paid out of the portion of the interchange fees that goes to the issuer.

(A BIN sponsor lends their financial license to a card issuer, acting as the issuer’s guarantor with the relevant financial authorities. It is, of course, also possible that no BIN sponsor is involved if the card issuer itself has gone through the regulatory process, as for example Kulipa has done in multiple geographies.)

Interchange fees are paid by the acquirer of the transaction to the issuer (for definitions on these, check out our article on How card payments work).

How is the interchange fee calculated?

This is where Mastercard or Visa come in, as they are the ones tasked with defining and facilitating the system of interchange fees.

There’s only one place in the world where it’s quite easy to define the interchange fee: Europe. For transactions in Europe, the interchange fee is fixed by regulation for domestic transactions at 0.2% (for debit cards). 

In the rest of the world, however, it’s very complicated to understand how much the interchange fee will be, today, for a given transaction happening in a given location. It can, and does, vary based on a variety of circumstances. 

Final interchange fees are calculated with an Interchange Rate Designator (IRD), which is essentially a set of rules that covers pretty much any combination of potential factors to come up with the final number for a given transaction. 

The range of IRDs is, frankly, wide. Here, it’s enough to say that an IRD is impacted by the type of card used, the type of merchant where the purchase is made, the geographic location of everyone involved, the technology used to complete the transaction, and the time when the transaction is submitted.

What does this all mean for a crypto wallet that issues payment cards?

Interchange fees have the potential to be an attractive new revenue stream for crypto wallets. But due to the complicated calculations involved, there’s also a certain opacity that opens the door to salesmanship in the industry. 

Specifically, because it’s natural to start dreaming when thinking about the benefits of a new revenue stream, some card issuers try to sell a dream. We’ve talked with clients who have told us they were promised up to 90% of the net interchange fee on a transaction. The thing is that this flashy number is often standing in front of hidden costs, or is actually not true. 

At Kulipa, our stance is that clarity and openness is better. That’s why our contracts spell out how we’ll keep somewhere between 20-50% of what we’re actually getting, depending on transaction volume, while being up front about what that number is.

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That leads to one big conclusion: Wallets should be aware that while interchange fees can indeed be a great new revenue stream, they aren’t really enough to be the foundation of a thriving business. The bottom line is that payments can be a great new use case that leads to happier customers; in exchange, interchange fees are a good incentive for providing these services.

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Want to learn more about how to enhance your crypto wallet with a branded debit card? Check out kulipa.xyz and reach out to set up a call to talk about your specific needs.