Visa Closes Meme Coin Credit Card Rewards Loophole

Visa is moving to close a loophole that allowed purchases of meme coins to be coded as “digital media” and earn credit card rewards, following a push from major banks.

The payments network is updating its transaction classification rules to prevent cryptocurrency purchases, particularly those involving meme coins, from qualifying for cashback, points, or airline miles. The change comes after banks, led by JP Morgan, advocated for the policy shift following the failure of broader stablecoin regulation in the Clarity Act.

Previously, some crypto purchases were miscoded by merchant processors under the broad “digital media” category used for streaming services or digital downloads. This allowed cardholders to earn significant rewards on volatile crypto transactions, a practice that issuers viewed as an unintended and costly benefit.

The policy adjustment represents a narrower regulatory win for traditional financial institutions seeking to limit perceived risks and costs associated with crypto. It standardizes how crypto transactions are processed across Visa’s global network, directly impacting consumer incentives for purchasing certain digital assets.