[Perspective] Why Can’t Credit Card Points Be Redeemed Immediately? How Stablecoin Technology Can Address Three Major Challenges Related to Synchronizing “Information” and “Value”?

Why Can’t Credit Card Points Be Immediately Redeemed?

Recently, there has been a news story related to the “2025 deadline.” A few years ago, UNESCO warned that videotape cassettes would demagnetize over time due to aging, and 2025 marks the “deadline” for these magnetic media. Therefore, UNESCO has called on individuals who still have videotapes at home to digitize their files as soon as possible to preserve precious memories and data.

For modern people who are already accustomed to streaming services, the experience of going to a video rental store, even having to “rewind” tapes to rewatch specific scenes, has long become a thing of the past, a tear of the times.

The evolution of financial products has followed a similar path.

For Generation Z and Generation Alpha, who were born into a world with computers, the internet, and even smartphones, the first investment or trading products they encounter may not be real estate, stocks, bonds, or mutual funds, but cryptocurrencies like Bitcoin, Ethereum, and even meme coins.

Cryptocurrencies run on blockchain technology, with characteristics such as “24/7 market operations,” “global trading,” and “real-time settlement.” As a result, this digital-native generation’s default mindset toward financial services is that they should embody these characteristics.

As this generation accumulates more investment experience and begins using traditional financial services and asset allocation, they may start asking many “why” questions.

Recently, while recording the podcast “Web3 Great Westward Expansion” with Lisa Lin, a journalist focusing on blockchain and FinTech development, she, under 30 years old, asked a question: “Why can’t credit card points, accumulated through card usage, be immediately redeemed for consumption?”

This may be a question that many people have never seriously thought about or have become accustomed to, but for Lisa’s generation, it seems strange, because in the world she is familiar with, from the internet to blockchain, this should be possible.

Challenges in Synchronizing “Information” and “Value” in Points Systems

Credit cards typically offer rewards mechanisms, such as cash rebates to offset the next bill or points for redemption to purchase goods, depending on the product positioning and attributes of the card.

However, because the credit card payment process involves multiple parties, including the issuing bank, clearinghouse, acquiring bank, and merchants, it often takes several days to confirm a transaction and calculate the rewards. This makes it difficult to receive and use rewards immediately at the time of the transaction.

Currently, most credit card point systems face three common challenges:

• First, rewards cannot be redeemed immediately at the time of consumption;
• Second, it is difficult to transfer or redeem points between different point systems;
• Third, it is hard for the average person to understand the actual value of each point and whether there is a corresponding value reserve behind it.

This is because each credit card point system functions like a private ledger, with differing operational mechanisms behind the scenes. For example, if one wanted to exchange a point from Cathay Bank’s points for a point from Far Eastern Bank, the value of each point might differ between the two systems, requiring real-time settlement during the exchange. This is an immense engineering challenge.

This is why most credit card point systems on the market cannot overcome the three challenges mentioned above, making it difficult to synchronize “information” and “value” effectively.

Benefits of Common Standards and Ledgers in Stablecoin Settlement Logic

The example of credit card points redemption reminds me of the application of stablecoins for automated, real-time settlement on decentralized ledgers.

The operation of cryptocurrencies is achieved through the “consensus mechanism” on the blockchain. When a transaction occurs, miners responsible for validating the transaction on the blockchain will reach a consensus within 10 to 20 minutes. If more than half of the miners agree, the transaction is recorded on the blockchain, ensuring that “information” and “value” are transmitted in real-time and synchronously, with high stability and accuracy. This process is one complete settlement.

In contrast to the way credit cards operate, when a cardholder makes a purchase, the transaction undergoes five major steps before it is settled:

1. The cardholder makes a purchase at a merchant;
2. The merchant sends a transaction authorization request to the acquiring bank and clearinghouse (e.g., Visa);
3. The merchant confirms the transaction amount with the cardholder;
4. The clearinghouse completes the transaction settlement with both the acquiring and issuing banks;
5. After the transaction is authorized and settled, the issuing bank sends a bill to the cardholder at the end of the billing cycle.

The credit card process involves multiple parties, and it may take several days to complete a transaction. This is because different banks and systems have varying specifications and ledgers.

This example highlights the benefits of blockchain technology’s decentralized ledger, with its common standards and shared ledger system.

The Importance of New Taiwan Dollar Stablecoin as Reserves: How Can Points Be Used in the Web3 Era?

This is also why the issuance of the “New Taiwan Dollar Stablecoin” in Taiwan is significant. Earlier this year (2025), the Financial Supervisory Commission held a public hearing to discuss the draft of the “Virtual Asset Service Provider (VASP) Special Law.” The most anticipated focus was the proposal to allow banks to issue stablecoins pegged to the New Taiwan Dollar or USD, providing a stable bridge for cryptocurrency transactions.

If banks can indeed issue New Taiwan Dollar stablecoins, then in the future, when banks issue credit card points, the stablecoin can be used as a reserve to ensure their value, with points issued through smart contracts.

There are two major benefits to this approach. First, it allows people to know the actual reserves behind each bank’s points, ensuring their value. Second, by using smart contracts, the rules for point redemption can be written into the contract, automating the point exchange process between different bank systems.

With the New Taiwan Dollar stablecoin as a reserve and points issued through smart contracts, brand points can be treated as building blocks, allowing banks to freely combine them according to their marketing strategies and create a variety of promotional approaches.

For example, if 100 points from Bank A can be redeemed for NT$10 of purchases, and 1 point from Bank A can be exchanged for 5 points from Bank C, these rules can be written into the smart contract. When a user wants to redeem points, the process will be executed automatically and immediately, ensuring transparency and opening the door to integration with the traditional financial system and fiat currencies.

From credit card point redemptions to other everyday scenarios, the advantages of using stablecoins as settlement tools are clear. They enable a more instantaneous, borderless, and highly transparent financial experience. In the Web3 new financial era, this truly synchronizes “information” and “value.” The financial experience brought by blockchain technology is an irreversible trend, and to some extent, it represents the new generation’s habits and fundamental expectations for finance.