Mastercard is moving toward crypto cards to support direct payments in “select cryptocurrencies” – nevertheless, Bitcoin is not included.
Mastercard, a significant player in the world of traditional payments, is now getting into cryptocurrency.
In a recent blog post, the credit card company announced that it will “start supporting select cryptocurrencies directly on our network” in 2021. Although Mastercard already works with cryptocurrency payment companies Wirex and BitPay on crypto debit cards, news today represented a shift to allowing cryptocurrencies to move in the actual network.
“Our crypto partners convert the digital assets on their end to traditional currencies, then transmit them through to the Mastercard network,” the blog post elaborated “Our change to supporting digital assets directly will allow many more merchants to accept crypto—an ability that’s currently limited by proprietary methods unique to each digital asset. This change will also cut out inefficiencies, letting both consumers and merchants avoid having to convert back and forth between crypto and traditional to make purchases.”
But which cryptocurrencies are included? The announcement is closed on that point, noting that it is looking for “crypto-assets that offer reliability and security.” Particularly stablecoins – cryptocurrencies designed to hold their value relative to an asset like the US dollar so that they can be used for payments.
Mastercard stated that its criteria for integrating cryptocurrency payments boil down to consumer protection, rigid regulatory and compliance measures like KYC, and a popular desire to use the cryptocurrency instead of merely investing in it. It is a payments platform, after all, designed to take a percentage of every transaction.
Mastercard has previously shown interest in stable cryptocurrencies. In September, it launched a platform for central banks to test their digital currencies, known as CBDCs.
All eyes have been on Bitcoin this week, as the world’s biggest cryptocurrency by market cap hit an all-time high after electric car maker Tesla acquired $1.5 billion of the asset. But the use of stablecoins like Tether and USDC had surged as retail and institutional investors ramp up their holdings and get ready to transfer the funds.
Today Tether reached a circulating supply of 30 billion USDT; there is about 25% more than there was from the previous month. It is a similar story for USDC, the second-most-popular stablecoin; it has gone from a market cap of $4.7 billion to $6.7 billion in the last 30 days.
Last month, the CEO of Mastercard rival Visa, Al Kelly said on a Q1 earnings call that his company was contemplating adding crypto to its network, though he didn’t make any promises.
“To the extent, a specific digital currency becomes a recognized means of exchange, there’s no reason why we cannot add it to our network, which already supports over 160 currencies today,” Kelly stated. It seems like Mastercard has beaten Visa to it.
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