Mastercard announced that it will start supporting select cryptocurrencies on its network. Giving customers, merchants and businesses the option to transact in either fiat or digital assets.
“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”. Executive vice president of digital asset and blockchain products and partnerships Raj Dhamodharan said.
“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.”
Mastercard’s announcement comes after Tesla Inc. revealed it purchased $1.5 billion worth of Bitcoin last month. Sending the leading cryptocurrency’s price to an all-time high past $48,000.
Last year, Mastercard partnered with crypto-exchanges Wirex and Bitpay to launch crypto-cards. However, the company historically has required digital currencies to be converted into fiat currencies before processing payments for transactions on its network.
Mastercard Central Bank Digital Currency Testing Platform
Mastercard additionally will be partnering with another exchange, LVL, to allow people to transact using their cryptocurrencies. It also launched a Central Bank Digital Currency (CBDCs) testing platform. For central banks to test and develop their digital currencies on top of Mastercard’s blockchain network.
“Our philosophy on cryptocurrencies is straightforward: It’s about choice,” Dhamodharan said. “Mastercard isn’t here to recommend you start using cryptocurrencies. But we are here to enable customers, merchants and businesses to move digital value.”
Not all cryptocurrencies will be supported on Mastercard’s network. The company said it will only feature those that meet requirements. “First and foremost we need consumer protections, including privacy and security of consumers’ information. The same level of security people have come to expect in their credit cards,” Dhamodharan said.
“Next, strict compliance protocols will be needed, including Know Your Customer, a requirement meant to snuff out illegal activity and deception in payment networks. Also, these digital assets must follow local laws and regulations in the regions they are used.
“Lastly, people will want to use these digital assets for payments, so that is one of our criteria too. To reach our network, crypto assets will need to offer the stability people need in a vehicle for spending, not investment.”
While Mastercard will soon support select cryptocurrencies, the company’s biggest rival, Visa Inc., hinted of doing so when a digital currency becomes a recognized means of exchange.