Mastercard Inc. announced on Wednesday that it will allow merchants to accept some cryptocurrencies on its network later this year. This is the recent adoption of digital coins by a traditional payment provider.
“We’re here to give customers, merchants and companies the ability to move digital assets – traditionally or cryptographic – as they see fit,” said Raj Dhamodharan, Executive Vice President, Digital Assets at Mastercard said in a blog post.
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Already works with some crypto platforms that issue Mastercard cards that users can use to spend their crypto assets. With these agreements, however, the cryptocurrencies do not flow through the Mastercard network, since the crypto partners convert the digital currencies into traditional currencies and then transfer them to Mastercard. By directly supporting some crypto assets, Mastercard will “remove inefficiencies so that both consumers and merchants will not have to switch between crypto and traditional to make purchases,” said Dhamodharan.
Mastercard plans to selectively decide which cryptocurrencies it will allow when it launches its plan. The company will seek cryptocurrencies that respect the privacy of consumer information, follow compliance procedures, and “provide the stability people need in a vehicle for spending, not investing.”
Traditional financial technology companies are increasingly experimenting with new digital assets. On the one hand, Mastercard had already announced that talks were being held with central banks about the possibility of “digital central bank currencies”, which would serve as alternative payment options beyond the fiat currency.
Michael Miebach, Chief Executive of Mastercard, said on the company’s latest earnings statement that Mastercard’s emphasis on consumer protection and transparency, as well as the acceptance network, could prove useful for central banks as they ponder this future of money.
Al Kelly, CEO of Visa Inc., said of Visa
The latest revenue says the company has also made arrangements with platforms and digital wallets that issue Visa cards so customers can spend their crypto holdings. “These wallet relationships have the potential for more than 50 million Visa credentials,” he said.
Kelly also spoke at length about the prospects for cryptocurrency on the Visa platform. “It goes without saying that as a particular digital currency becomes a recognized medium of exchange, there is no reason why we cannot add it to our network, which already supports over 160 currencies,” he said .
PayPal Holdings Inc.
Late last year, US users started buying and selling cryptocurrencies like Bitcoin through their platformThe company plans to allow consumers to use their crypto balances as a funding tool as early as this quarter when they shop at PayPal merchants. Square Inc.
Chief Executive Jack Dorsey is a big believer in Bitcoin, and he started letting Square’s Cash app users buy and sell this cryptocurrency more than three years ago.