Mastercard, a leading global payments and a technology company will allow merchants, begin allowing merchants transact in select cryptocurrencies directly on its network later this year. This announcement comes days after Elon Musk’s Tesla revealed it had purchased $1.5 billion of bitcoin and would soon accept it as a form of payment.
According to a blog post by MasterCard, the company Executive Vice President Blockchain/ Digital asset products and partnership explained that digital assets are becoming a more important part of the payments world.
“We are seeing this fact play out on the Mastercard network, with people using cards to buy crypto assets, especially during Bitcoin’s recent surge in value. We are also seeing users increasingly take advantage of crypto cards to access these assets and convert them to traditional currencies for spending”.
“We are preparing right now for the future of crypto and payments, announcing that this year Mastercard will start supporting select cryptocurrencies directly on our network. This is a big change that will require a lot of work. We will be very thoughtful about which assets we support based on our principles for digital currencies, which focus on consumer protections and compliance”.
Why only selected cryptocurrencies will be supported on its network
Not all of today’s cryptocurrencies will be supported on mastercard network.
The company is yet to disclose which digital currencies it intends to support. But stable coins and other digital assets in circulation with strict compliance measures that meet the requirements will be supported.
“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”.
Mastercard crypto partnership
Mastercard teamed up with Wirex and BitPay last year to create crypto cards that allow people to transact using their cryptocurrencies. This year it joined forces with LVL, an up-and-coming cryptocurrency exchange.
All crypto partners convert the digital assets on their end to traditional currencies, then transmit them through to the Mastercard network. Therefore the company change to supporting digital assets directly will allow many more merchants to accept crypto and cut out inefficiencies such as trading crypto and traditional currency to make purchases.
Added to this work, Mastercard is actively engaging with several major central banks around the world, as they review plans to launch new digital currencies, dubbed CBDCs, to offer their citizens a new way to pay.
The company holds 89 blockchain patents granted globally with an additional 285 blockchain applications pending worldwide. Mastercard has the biggest blockchain patent portfolios to draw from to make these projects successful.