A key player in traditional payments will soon join the cryptocurrency industry. We are talking about the Mastercard company, which announced “support for cryptocurrency payments directly in its own network.”
The new feature should appear as early as 2021. And while Mastercard is already working with cryptocurrency payment companies Wirex and BitPay to issue cryptocurrency debit cards, the latest announcement represents a shift towards cryptocurrency exchanges on the payment platform network itself.
It is worth recalling that the attitude of the Mastercard management towards cryptocurrencies, until recently, left much to be desired. In particular, in the summer of 2018, the CEO of the company, Ajay Banga, called blockchain assets garbage. According to him, anonymous tools cannot be considered a full-fledged means of payment, therefore, they are clearly not suitable for use by ordinary people.
However, later the situation changed. In particular, in July 2020, the company announced the start of cooperation with cryptocurrency companies. For the latter, the opportunity was created to issue their own plastic cards that are suitable for spending conventional and digital currencies.
Mastercard and Bitcoin
Here is a quote from the official announcement on this matter, which reflects the company’s position. The cue is from Decrypt .
Our partners convert digital assets on their side into traditional currencies, and then transfer them to the Mastercard network. Our move to supporting digital assets directly will allow many more merchants to accept cryptocurrency – an opportunity that is currently limited by the unique characteristics of each digital asset. This change will also remove inefficiencies, allowing both consumers and merchants to avoid the need to convert between cryptocurrencies and traditional currencies to make purchases.
That is, the company wants to make life easier for users and save them from a few extra moves. Thanks to the innovation, cardholders will be able to make cryptocurrency payments among themselves without the need for settlements in fiat. This will surely attract new customers.
But what kind of cryptocurrencies do the representatives of MasterCard mean? The company said in a statement that the company is looking for “cryptoassets that offer reliability and security” to customers. Namely, stablecoins are coins whose market value is also pegged to the value of the US dollar .
According to Mastercard, its criteria for integrating cryptocurrency payments boil down to consumer protection, stringent regulatory requirements, and anti-money laundering and crime financing measures.
This means that users should not count on the integration of Bitcoin. And this is despite the fact that on the eve of Tesla invested $ 1.5 billion in the first cryptocurrency , which in fact significantly improved its reputation in the eyes. Well, other companies are planning to repeat the experience of a large car manufacturer – at least according to analysts.
Mastercard has previously shown interest in stablecoins. Recall that in September the company launched a platform for central banks, within which they could test the first versions of their own centralized assets. By the way, the most famous competitor to Mastercard – Visa – is also thinking about integrating cryptocurrencies into its network. This was hinted at by the company’s CEO Alfred Kelly during his quarterly address to investors.
As you can see, Mastercard is not yet considering the possibility of direct integration of Bitcoin and some other cryptocurrencies, as was done by PayPal last year. And this is quite logical: so far, too high volatility of Bitcoin – that is, sharp changes in its rate – does not allow us to consider the main cryptocurrency as the best means of payment in everyday life. But stablecoins are good for this purpose.
Be that as it may, such a move by the company can be considered a success for the industry. The representatives of the card issuer will obviously not stop there, which means that in the future we should certainly wait for the appearance of some new function. This is where it is worth looking at the future success of Bitcoin and other coins in terms of adoption. If a few more major platforms add support for full-fledged cryptocurrencies – especially trading platforms – Mastercard management will have a chance to change their point of view.