A growing interest in digital currencies has prompted Mastercard to announce it will soon allow merchants to accept crypto payments.
Cryptocurrencies are emerging as a competitive force in the global payment system.
For the first time, Mastercard will enable businesses, merchants and customers to benefit from this trend with direct payments.
In a blog post, Mastercard Executive Vice President for Blockchain and Digital Asset Products Raj Dhamodharan said:
“This is a big change that will require a lot of work. We will be very thoughtful about which assets we support based on our principles for digital currencies, which focus on consumer protections and compliance.
“Our philosophy on cryptocurrencies is straightforward: 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—traditional or crypto—however they want. It should be your choice, it’s your money.”
He sees new opportunities coming from transacting using an “entirely new form of payment”. Merchants may attract new customers who already have digital assets, or build loyalty with existing customers who prefer to use crypto. Customers will benefit from new ways to save, store and send currency.
Which currencies will be supported?
The company has not yet disclosed which digital currencies it will support, and where.
In the recent past, many stablecoins have become more regulated and reliable. Yet Mastercard has vowed to support only crypto assets meeting its high standards for:
- Consumer protections offering the same level of security as credit cards, in areas such as privacy and security of consumer information.
- Strict compliance protocols, including Know Your Customer measures to prevent illegal activity and deception in payment networks.
- Digital assets adhering to local laws and regulations in the regions they are used.
- The use of digital assets as a stable vehicle for spending, not investment.
Mastercard already supports the use of crypto cards through Wirex and Uphold, allowing consumers to convert crypto to fiat currency to spend.
Coindesk says the new initiative promises to “upend that dynamic among the store owners and businesses who opt in”. These parties will be able to conduct business beyond the fiat ecosystem.
But needless to say, while Raj Dhamodharan said the trend towards spending ‘is unmistakable’, it depends on customers being willing to part with their crypto.
There is no guarantee Mastercard will support the world’s largest crypto: Bitcoin. And as Coindesk points out, many Bitcoin fans live by the “buy-and-hold” philosophy of treating coins as investment vehicles rather than payment tools.