Following in its biggest competitor, Visa‘s, footsteps, payments giant Mastercard said it “will start supporting select cryptocurrencies directly on our network.” However, at least in the initial stage, it’s about stablecoins, which are not cryptocurrencies.
“Our philosophy on cryptocurrencies is straightforward: It’s about choice,” Raj Dhamodharan, Executive Vice President (VP) at Mastercard, said in a blog post yesterday, adding “It should be your choice, it’s your money.”
But it looks like, for now, “your choice” is going to be limited to stablecoins only.
“We expect consumers and the ecosystem as a whole will start to rally around the crypto assets that offer reliability and security. It’s those very same stablecoins that we expect to bring into our network,” the VP said.
Mastercard said it needs four things in order to start supporting a new asset on its network:
- Consumer protection, including privacy and security of consumers’ information.
- Strict compliance protocols, including Know Your Customer.
- Assets must follow local laws and regulations.
- These assets will need to offer the stability people need in a vehicle for spending, not investment.
In either case, the company has already partnered with other payment processors, such as Wirex and BitPay, and the LVL crypto exchange, in order to create crypto cards that allow people to transact using “their cryptocurrencies.”
Mastercard added that there are “many more” similar partnerships in the pipeline.
“In all of these cases, cryptocurrencies still don’t move through our network. Our crypto partners convert the digital assets on their end to traditional currencies, then transmit them through to the Mastercard network,” the company said.
It is also interested in central bank digital currencies (CBDCs): “Last year, we created a test platform for these banks to use these currencies in a simulated environment.”
Mastercard claims it has 89 blockchain patents granted globally with an additional 285 blockchain applications pending worldwide.
“Mastercard’s plans to integrate crypto payments represents another indicator of the deep structural shifts taking place in our financial infrastructure. Incumbent payment platforms are embracing digital currency solutions that are more equipped for the borderless, internet-enabled economy,” John Wu, president of Ava Labs, told Bloomberg.
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– Stablecoins May ‘Penetrate Non-Crypto Markets’ & Surpass USD 100B in 2021
– Stablecoins Might Be Better Than Bitcoin For Payments, But Maybe Not For Long