- Circle and HKT have signed an MoU to develop blockchain-based customer loyalty solutions.
- The partnership aims to enhance consumer engagement.
Circle, a leading player in the blockchain industry, has signed a Memorandum of Understanding (MoU) with HKT, a prominent telecommunications provider in Hong Kong. This collaboration aims to explore the development of customer loyalty solutions utilizing blockchain technology, targeting merchants across the region.
Stablecoin issuer Circle has signed a memorandum of understanding (MOU) with Hong Kong Telecom (HKT), the largest telecommunications company in Hong Kong, to explore potential collaboration in developing a blockchain-based customer loyalty solution for merchants in Hong Kong.…
— Wu Blockchain (@WuBlockchain) October 29, 2024
The partnership aims to develop services that utilize blockchain technology to enhance consumer discovery and interaction with merchants. Circle also pointed out that its Web3 products, namely the programmable wallets, are well-positioned to assist organisations in incorporating digital assets and smart contracts in their consumer and business applications.
According to Jeremy Allaire, the co-founder and CEO of Circle, the partnership is a crucial development. He pointed out that the partnership positions the company’s Web3 Services as a leading solution for customer loyalty. “This collaboration is a testament to our commitment to helping businesses unlock the potential of blockchain technology,” Allaire stated. He believes the initiative will redefine loyalty programs and equip merchants with essential tools to excel in the digital economy.
Circle appears to be strategically positioning itself for business opportunities in Asia as they seem to be on the radar. Last year, Allaire expressed the company’s interest in regulatory developments in Hong Kong. The blockchain is ripe for growth in the region due to changes in the legal framework. In February, Circle also broadened its footprint in Asia by integrating with Coincheck to improve USDC availability in Japan.
In a related development, on October 30, the Hong Kong-based stablecoin issuer First Digital Trust announced that it had launched the First Digital USD on the Solana Blockchain after launching products on Ethereum and the BNB Chain.
The Future of Loyalty Programs
Circle’s recent introduction of the Smart Contract Platform allows businesses to establish on-chain loyalty programs. This development allows for easy accumulation of points and their redemption for rewards and, therefore, improves customer satisfaction. The shift from conventional reward programs to blockchain mechanisms opens up opportunities for new and improved rewards, such as tokenization, thus providing new value propositions for consumers.
Other industry giants have also started to pilot Web3 solutions for customer loyalty. In January, Visa also launched a Web3-based loyalty service that enables brands to build digital wallets for points. Luxury brands, including Hugo Boss, have also followed suit to strengthen customer engagement through Web3 solutions.
In a different but significant development, Circle Internet Financial Ltd. has recently hiked the fees for redeeming its USDC stablecoin for the second time in under a year. This comes at a time when the charges for users who want to liquidate their assets via the Circle Mint platform have been on the rise.
Before the recent change, holders of USDC were able to redeem it for free without any restrictions. In February, Circle introduced a charge for swaps over $15m. Now, the new tiered fee structure has been implemented, and fees will be charged for users who redeem more than $2 million per day. The fees begin at a minimum of 0.03% per transaction for redemptions over this limit and can rise to 0.1% for redemptions over $15 million.
