Mastercard to Support Cryptocurrency
- Mastercard will initially support stablecoins due to their reliability and security.
- Crypto payments will be processed by Mastercard’s external partners and converted to fiat currencies.
Image from Shutterstock
The credit card giant’s announcement comes just two days after Tesla revealed it had purchased $1.5 billion worth of Bitcoin.
According to the company’s press release, allowing users to spend cryptocurrencies will open merchants up to new customers who are already flocking to digital assets. Mastercard said it will initially support stablecoins due to their “reliability and security,” but declined to name any specific digital assets it plans on integrating.
In order too be integrated into Mastercard’s payment network, cryptocurrencies will need to provide consumer protection, enable strict compliance protocols, follow local laws in the regions they’re used in, and offer price stability.
The company has been working with various cryptocurrency companies in the past few years, including industry giants such as Wirex and BitPay. Partnerships with cryptocurrency exchanges and payment processors mean that cryptocurrencies won’t move through the Mastercard network. The company explained its crypto partners will be tasked with converting the digital assets on their end to fiat currencies and transmitting them through to the Mastercard network.
In addition to partnering up with crypto companies, Mastercard is also actively working with several major central banks around the world and could include central bank digital currencies (CBDCs) in its payment network.
- Currently in its beta launch phase in Brazil, the Binance Card will allow its holders to make payments and purchases using 13 supported cryptocurrencies.
- Brazil has become the second country in Latin America to receive the product, following a similar announcement in Argentina in August 2022.
Shutterstock
- The new program will see MasterCard act as a “bridge” between Paxos and financial institutions, allowing them to offer crypto trading services to their clients.
- The payments giant will also assist institutions with regulatory compliance and security, two reasons banks cite for avoiding the asset class.
- MasterCard’s Crypto Secure software will make use of AI, on-chain data, and other sources to determine the crime risks of crypto exchanges within its network.
- It will not only improve security, but also help MasterCard’s partners stay compliant with local regulations when fighting crypto fraud.