Mastercard to Simplify Conversion From Crypto to Fiat Currency
Payments company leveraging partnerships to help crypto companies offer card programs
- Evolve Bank & Trust, Paxos Trust Company and Circle among Mastercard’s partners in latest crypto push
- Efforts come after rival Visa reported that consumers spent $1 billion worth of cryptocurrency through Visa’s crypto-linked cards in the first half of 2021.
Mastercard is looking to make it easier for its partners to convert cryptocurrency to traditional fiat currency, enabling them to offer a card option to people wanting to spend their digital assets anywhere Mastercard is accepted.
Research published by Mastercard in May found that 93% of people across 18 global markets said they would consider using at least one emerging payment method – such as cryptocurrency, biometrics, contactless or QR code – in the next year. Overall, 40% of the people surveyed said they plan to use cryptocurrency in the next year, the report added.
But when consumers spend cryptocurrency, it must enter and settle on Mastercard’s network as traditional fiat currency, such as the US dollar, the company explained in a news release.
“Today not all crypto companies have the foundational infrastructure to convert cryptocurrency to traditional fiat currency, and we’re making it easier,” Raj Dhamodharan, Mastercard’s executive vice president of digital asset and blockchain products & partnerships, said in a statement. “…Mastercard expects to deliver on our promise of consumer choice to provide options to people around the world on how and when to pay.”
The global payments company is in discussions with Evolve Bank & Trust and Metropolitan Commercial Bank to issue cards, as well as Uphold and BitPay to provide real-time crypto wallet technology, Mastercard announced Tuesday. It is also working with i2c Inc., Apto Payments and Galileo Financial Technologies to support processing and program management.
In addition, Paxos Trust Company, a blockchain infrastructure and regulated stablecoin issuance platform, and Circle, the principal operator of the USD Coin (USDC), will use their platforms to facilitate the conversion of crypto to fiat through fiat-backed stablecoins.
Despite the rise of digital currency adoption over the past year, most people are hesitant to spend it due to its volatile nature and the friction associated with sending funds, said Matthew Gould, Founder and CEO of Unstoppable Domains, which offers decentralized websites and blockchain-based domain names. The innovations by companies like Mastercard are changing that, he added.
“This move signals major progress towards making crypto easier to transact with for both companies and consumers,” Gould told Blockworks. “Dollar-pegged stablecoins like USDC are the future of crypto payments, and it’s exciting to see financial institutions like Mastercard adapting to a world beyond fiat.”
Mastercard’s efforts come after rival Visa revealed earlier this month that it was partnering with 50 crypto platforms on card programs that allow users to convert and spend digital currency at 70 million merchants. Visa reported that consumers spent more than $1 billion worth of cryptocurrency on goods and services through Visa’s crypto-linked cards in the first half of 2021.
Mastercard had shared plans in February to allow its merchants to receive and settle transactions with digital assets by the end of the year. Gemini announced in April that Mastercard would serve as the exclusive card network for its bitcoin-back credit card.