Global payments service provider Mastercard has announced that it will launch select cryptocurrency payment support on its network this year.
In a blog post on the Mastercard website Raj Dhamodharan, executive vice president of Blockchain, Digital Asset Products & Digital Partnerships, revealed that the company would support select cryptocurrencies directly on its network this year.
Dhamodharan did not explicitly list the cryptocurrencies that would be supported through its payments networks but did note that many of the various digital currencies do not meet the compliance measures that Mastercard demands.
“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,” Dhamodharan wrote in the post.
He also noted that onboarding direct support of select cryptocurrencies will open up more payment possibilities for consumers and merchants.
Taking crypto relationship to the next level
Mastercard has already been involved in the cryptocurrency space for a few years although the services it has offered the industry have kept it at an arm’s length. As Dhamodharan explained, the firm had already teamed up with Wirex and BitPay to create cryptocurrency debit cards that allow users to make transactions with their cryptocurrency holdings. Mastercard also announced a partnership with cryptocurrency exchange LVL in January 2021 that would offer crypto-debit cards to its clients as well.
“In all of these cases, cryptocurrencies still don’t move through our network. Our crypto partners convert the digital assets on their end to traditional currencies, then transmit them through to the Mastercard network. 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,” Dhamodharan explained in the post.
The Mastercard Blockchain executive vice president also revealed that the firm has been engaging with several major central banks around the world to assist in their efforts to develop and launch central bank digital currencies.
Four key considerations
Dhamodharan outlined four key points that Mastercard will use to identify cryptocurrencies that it will support through its network.
The Mastercard Blockchain executive vice president highlighted consumer protection measures including privacy and security of consumers information as the most important factor. Following that compliance protocols are the next consideration, including the necessary KYC and AML measures. Dhamodharan also noted that the cryptocurrencies must fit into local laws and regulatory parameters in the regions they are being used by Mastercard customers.
Dhamodharan also highlighted the need for cryptocurrencies to offer stability as a means of payment for them to be onboarded into the Mastercard ecosystem.
“Lastly, people will want to use these digital assets for payments, so that is one of our criteria too. To reach our network, crypto assets will need to offer the stability people need in a vehicle for spending, not investment,” Dhamodharan wrote.