In a press release published on 20 July, Circle announced it has entered into a partnership with Mastercard to launch a crypto-to-fiat conversion pilot program using USDC. The engagement will enable Mastercard to enhance its crypto card program for cryptocurrency exchanges, making it simpler for its partners to convert crypto to fiat currencies.
Card issuers that enable cryptocurrency payments first need to convert those assets before settling the transaction with the merchant. Conversions are a costly and complex step for most issuers, as most digital assets don’t have the same stability as the U.S. dollar has.
By using Circle’s USDC to settle these transactions, card issuers such as Mastercard will be able to provide its users with the stability seen only in traditional settlement options. The test of this new capability will enable more crypto companies to offer a card option that allows their customers to spend their digital assets anywhere Mastercard is accepted.
Jeremy Allaire, the Co-Founder and CEO of Circle, said the engagement with Mastercard shows that USDC has taken on an important role in facilitating payments and commerce on the internet. The company is dedicated to building a vital bridge between digital currency payment systems and large, established payment networks such as Mastercard, he added in the press release.