- The financial giant will start supporting digital currencies this year.
- The move will allow millions of merchants worldwide to accept crypto payments.
- Most digital currencies do not fall under Mastercard’s criteria.
The multinational financial service provider is incorporating digital currencies into its network. The credit-card giant announced this week to be already prepared for the future of crypto and payments. The company said it will start supporting selected currencies within 2021.
Allows crypto payments acceptance
MasterCard made a statement this Wednesday claiming that the trend on cryptocurrency usage is strong and growing. The company said it noticed the increasing numbers of card usage to buy digital assets, especially during the latest Bitcoin’s price surge.
MasterCard stated it is now ready to offer such a choice for its users.The company’s move will allow millions of merchants worldwide to accept crypto payments and also transact with digital assets:
This change may open merchants up to new customers who are already flocking to digital assets, and help sellers build loyalty with existing customers who want this additional option. And customers will be able to save, store and send money in new ways.
Criteria for digital coins
It is not yet clear which digital currencies MasterCard will add to its network. The company said it will consider carefully which coins to support, mainly focusing on consumer protection and compliance.
MasterCard, however, presumed that its card users would prefer using digital assets for payments, not only investments. The company hints that cryptocurrencies will need to offer stability and declares it as one of the main criteria.
Reportedly, it will only support digital currencies that strictly comply with KYC (Know Your Customer) policy, local laws and regulations in the regions they are used.
On the flipside
- The biggest digital currencies including Bitcoin and Ethereum are decentralized, volatile, not anti-money laundering compliant, and not ruled by the authorities. They do not meet Mastercard’s criteria.
- Regulatory-complaint USDC might be one of the digital currencies added to the Mastercard network.
Mastercard partnered with crypto payment network Wirex last year, however, it only supported the limited cryptocurrency transactions where receivers could only get crypto payments converted to fiat currencies.
Last December the company’s rival PayPal announced its users would be able to buy and sell cryptocurrencies by the end of the first quarter of 2021.
The new boom of crypto investors
Mastercard’s statement comes days after Tesla shook up the crypto industry. The electric car giant invested $1.5 billion in the world’s biggest digital coin, driving Bitcoin’s price to new record highs.
Earlier this year, the world’s biggest asset manager BlackRock opened for crypto and added Bitcoin futures as an investment to two of its funds. BNY Mellon, the oldest custodian bank in the United States, is ready to offer integrated cryptocurrency services for its clients. Twitter considers adding Bitcoin to its balance sheet and even using it to pay for the employees if they’ll ask.
The fresh resurgence of institutional interest in cryptos continues the trend of 2020, when multiple institutional investors brought the total value of the crypto market over a record high of 1 trillion US dollars.