- The card giant said it will support certain digital assets for settlement on its network later this year
- This comes as Tesla plans to accept bitcoin for payment and Amazon prepares to launch a digital currency for retail in emerging markets
Mastercard plans to allow its merchants to receive and settle transactions with digital assets this year, it said in a blog post late Wednesday.
Mastercard currently issues cards to digital asset companies that allow their customers to spend crypto, but the settlement is still done in fiat currency. Along the way there’s still an intermediary to process the transaction and convert currencies. Mastercard’s proposal would be a dramatic change, allowing for settlement of the transaction in digital assets.
“Our philosophy on cryptocurrencies is straightforward,” said Raj Dhamodharan, executive vice president for digital asset and blockchain products, in the blog post. “It’s about choice. Mastercard isn’t here to recommend you start using cryptocurrencies. But we are here to enable customers, merchants and businesses to move digital value.”
The announcement came days after competitor Visa revealed an API that lets banks to offer digital assets to their customers, and electric vehicle giant Tesla said it could begin accepting bitcoin as payment,
Mastercard has 89 blockchain patents granted globally, and an additional 285 pending.
Dhamodharan said it will be “very thoughtful” about what digital assets it supports on its network emphasizing the need for consumer protections and regulatory compliance.
“To be completely clear, not all of today’s cryptocurrencies will be supported on our network. While stablecoins are more regulated and reliable than in the recent past, many of the hundreds of digital assets in circulation still need to tighten their compliance measures, so they won’t meet our requirements,” he said.
All this comes as Amazon, which generates approximately $300 billion in revenue from retail every year, kicks off efforts to integrate digital currencies in Mexico and emerging markets. According to a job post its hiring a software development manager to “help us launch a new payment product” that will enable its customers to on-ramp their cash into digital currency to pay for its products and services.
It’s not yet clear if this will be a ‘walled garden’ digital currency like Facebook proposed with Diem or some sort of publicly tradable digital asset that would work with other platforms like Mastercard’s settlement network.