Realising the global momentum on cryptocurrency, Mastercard announced recently that it will allow cardholders to transact in certain cryptocurrencies. With this announcement, the financial services firm becomes the newest organisation to embrace digital currency.
The company in a blog post written by Mastercard Executive Vice President Digital Assets & Blockchain Products and Partnerships Raj Dhamodharan said that many users on the Mastercard network have used their cards to buy crypto assets. This has been seen all the more during Bitcoin’s recent surge.
“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,” stated Raj Dhamodharan, executive vice-president of digital asset and blockchain products and partnerships, in the blogpost.
The company also added that this is in no way a recommendation for Mastercard holders to start using cryptocurrencies. “We are here to enable customers, merchants and businesses to move digital value – traditional or crypto – however, they want. It should be your choice, it’s your money,” stated the blogpost.
However, the company will not support “all of today’s cryptocurrencies” on its network. They will only bring “stable coins” into their network.
Last year, the company partnered with two of the biggest cryptocurrency firms – Wirex and BitPay – “to create crypto cards that allow people to transact using their cryptocurrencies”. This year, Mastercard has teamed up with LVL, an up-and-coming cryptocurrency exchange.
However, cryptocurrencies will not move through the Mastercard network. The partners will convert the cryptocurrencies into traditional currencies, “then transmit them through to the Mastercard network”.
This apart, the company is also “actively engaging with several major central banks around the world, as they review plans to launch new digital currencies”.
“Our change to supporting digital assets directly will allow many more merchants to accept crypto — an ability that’s currently limited by proprietary methods unique to each digital asset. This change will also cut out inefficiencies, letting both consumers and merchants avoid having to convert back and forth between crypto and traditional to make purchases,” read the blogpost.
It is also pointed out that 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. “Last year, we created a test platform for these banks to use these currencies in a simulated environment. Using our deep experience in payments technologies, we look forward to continuing these partnerships with governments and helping them explore the best ways to develop these new currencies,” states the blog.
A few days ago, electric carmaker Tesla had announced that the company had invested $1.5 billion in Bitcoin. The announcement sent the cryptocurrency to a record high.
