The tokenization of assets allows even credit cards to be transformed into tokens. In addition to more security in financial transactions, tokenized cards may change the relationship with the consumer, offering a new way of sharing data in each purchase.
In places like India, tokenized cards prevent data sharing with the trader protecting consumer information.
The measure was recently adopted by the country, where 40% of credit card purchases took place through tokens, in September 2022. In total, 35 credit card tokens have been created in India.
Credit card tokens
India has decided to adopt the use of tokenized cards as a way of protecting users’ data. This move was prompted after a regulation by the Reserve Bank of India determined that no database can store information about consumers’ cards.
The regulation, which came into effect on October 1, 2022, applies to both credit and debit cards, and data such as the three-digit CVV and the card’s validity can no longer be stored.
Thus, India has suggested the tokenization of cards as a way to prevent the sharing of this data. The token is created through an application that connects the user’s bank to the encrypted digital asset.
Virtually any asset can be turned into a digital token. From stocks to credit cards, tokens represent a new type of trading that will take hold in the digital economy.
And in India, tokens have brought more security for consumers using credit and debit cards. For each transaction, a unique token is generated in the system, with enough information to validate the purchase without exposing sensitive data about the user.
Asset tokenization is common in the crypto market, where blockchain technology brings NFTs, utility tokens, and even fan tokens to life. Check this link, and you can learn more about asset tokenization.