New Mastercard Program Looks To Offer Crypto Capabilities to Banks

The payments giant will partner with Paxos to offer a new suite of products, including crypto trading, custody, and security management for institutions


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key takeaways

  • Mastercard survey found 65% of respondents wanting their financial institution to offer crypto-related services
  • The payments giant earlier this month revealed a dashboard designed to track where cardholders are purchasing crypto products

Mastercard is delving deeper into the cryptoasset business by offering banks the ability to provide trading capabilities to customers, as it seeks to utilize recent acquisitions and partnerships.  

Institutional partners involved in Mastercard’s Crypto Source program are set to gain access to buy, hold and sell certain cryptoassets, the company revealed Monday. 

A Mastercard spokesperson told Blockworks the initiative is being prepared for pilot programs, noting that the company is working out which assets will be supported.

The upcoming program comes after banking giant BNY Mellon said last week that it would allow certain institutional clients the ability to hold and transfer bitcoin and ether on its new crypto custody platform in the US. Industry watchers and executives have said that TradFi institutions are opting to get more involved in the segment despite the ongoing crypto winter.

Mastercard is also set to offer banks and fintechs security management, the ability to spend and cash out crypto, as well as product development and consulting services. 

Blockchain infrastructure platform Paxos is slated to provide the cryptoasset trading and custody services on behalf of the banks, while Mastercard will use its technology to integrate those services into banks’ interfaces.

Mastercard had previously partnered with Paxos — as well as others such as Evolve Bank & Trust and Circle — last year in an effort to streamline crypto-to-fiat conversions.

“Our commitment is simple — to explore crypto and the underlying digital assets technology to support consumer choice in payments,” Mastercard Chief Digital Officer Jorn Lambert said in a statement. “Today is an exciting step in our crypto journey that draws on the strengths of our global businesses, from open banking and identity verification to analytics and fraud monitoring to settlement solutions.”

Nearly 30% of respondents of Mastercard’s 2022 New Payments Index — published in June — held crypto as an investment, with another 65% reporting a preference for their current financial institution to offer crypto-related services.

Ajay Bhalla, the company’s president of cyber and intelligence, said in a statement that Mastercard’s acquisitions last year of crypto intelligence company CipherTrace and customer identity verification company Ekata give it a unique edge.

Mastercard said earlier this month that it was using data from CipherTrace to launch Crypto Secure, a dashboard designed to track where cardholders are purchasing crypto products.  

The payments company last month launched a debit card allowing users to customize their own NFT avatars. It also partnered with crypto exchange Binance to offer a prepaid crypto card in Argentina, and with Middle Eastern digital asset gateway Fasset to expand its services to Indonesia.

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