• Payments giant looks to offer “a safe space” for governments and private sector banks to figure out how a CBDC would work
  • “We can’t run fast enough right now” into data privacy and authentication segment of crypto, Mastercard CEO says

Mastercard is focused on facilitating crypto investments as well as readying its network for a central bank digital currency, CEO Michael Miebach said during the company’s third quarter earnings call on Thursday.

“We could not have an earnings call without talking about crypto,” Miebach said when asked about the space. “We see significant volumes in terms of people actually investing in crypto and selling crypto, so as an asset class there’s a lot going on, and I think we have a role to play to facilitate consumers wanting to do that.”

Mastercard most recently partnered with digital asset platform Bakkt to make it easier for merchants, banks and fintechs in the US to embrace and offer cryptocurrency solutions and services. 

Miebach noted that the most likely chance for crypto to be used as a payment tool will be through a government-issued central bank digital currency. Mastercard will make its network ready to handle a CBDC if and when that happens, he added. 

“How will a government test that? How will a country figure out between the private sector banks and the governments how to do this?” the CEO said. “That’s where our sandbox comes in; we can provide a safe space for governments and private sector banks to figure out how that would actually work.”

“Should there be a private sector stablecoin, we might also do that,” Miebach added, “but we have very strict principles on when to do this and when not.”

Recent acquisition will be key to company’s growth in crypto

Mastercard announced its plan to acquire crypto intelligence company CipherTrace in September. The firm previously said that the purchase would enhance its crypto capabilities for insight into more than 900 cryptocurrencies currently monitored by CipherTrace, which is funded by the US Department of Homeland Security.  

CipherTrace was founded in 2015 and has provided “blockchain forensics” for over 150 of the largest banks, exchanges, financial institutions and regulators across roughly 7,000 cryptocurrency entities.

Eric Risley, a managing partner at Architect Partners, previously pointed to Mastercard’s purchase of CipherTrace as the types of deals financial services incumbents will likely do to build their presence in crypto.

“What does CipherTrace actually do? They drive compliance and [anti-money laundering] checks into crypto transactions,” Miebach said during the earnings call. “We can’t run fast enough right now to get into this space, because a lot of other people are deep into crypto and these questions are not resolved.”

  • Ben Strack is a Denver-based reporter covering macro and crypto-native funds, financial advisors, structured products, and the integration of digital assets and decentralized finance (DeFi) into traditional finance. Prior to joining Blockworks, he covered the asset management industry for Fund Intelligence and was a reporter and editor for various local newspapers on Long Island. He graduated from the University of Maryland with a degree in journalism. Contact Ben via email at [email protected]ks.co