View of Mastercard’s office building in Auckland, New Zealand, 28 July, 2019. Shutterstock
Payments giant MasterCard intends to assist financial institutions in offering cryptocurrency trading through a new partnership with crypto trading platform Paxos, CNBC reported on 17 October.
According to the publication, the new program will see MasterCard act as a “bridge” between Paxos and financial institutions such as banks, allowing them to offer crypto trading services to their customers. MasterCard noted there was still a large demand for crypto, though polling shows roughly 60% of users wanted to first invest digital assets through their banks. MasterCard’s chief digital officer, Jorn Lambert, said in a statement:
“There’s a lot of consumers out there that are really interested in this, and intrigued by crypto, but would feel a lot more confident if those services were offered by their financial institutions. It’s a little scary to some people still.”
In order to attract institutions to its upcoming program, MasterCard said it was ready to take care of the two main concerns of banks, crypto compliance and security. The payments giant noted it will assist institutions in following crypto compliance rules, verify transactions, provide anti-money laundering (AML), and know-your-customer (KYC) checks. The company expects to pilot the product in the first quarter of 2023.
At the start of the month, MasterCard also revealed a crypto risk management service, called Crypto Secure, to help banks and card issuers avoid crypto-related fraud. Powered by CipherTrace, the new software uses AI algorithms, on-chain data, and other sources to determine the risk factor of exchanges within MasterCard’s network.
MasterCard’s primary competitor, Visa, has also shown interest in the crypto market as of late. Earlier this month the company partnered with cryptocurrency exchange FTX, which will soon launch a Visa crypto debit card in 40 countries around the world, with a focus on Latin America, Europe, and Asia in the initial phases of the rollout.