MasterCard, which has almost one billion users and over 30 million merchants will join Paypal in opening the floodgates for cryptocurrency adoption this year.
The payments giant announced plans to support certain cryptocurrencies in 2021, paving the way for another wave of crypto adoption.
The firm believes this move could increase brand loyalty with existing customers who are migrating to cryptocurrencies over fiat, and also wishes to provide the ability for customers and merchants to choose how they move digital value.
The statement read: “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”
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While the payments giant noted it plans to support stablecoins due to their ‘reliability and security’, Mastercard did not name any specific cryptocurrencies it will integrate. The overwhelming likelihood is that the payment company will support bitcoin and ethereum right off the bat.
The company outlined four criteria by which it will assess cryptocurrencies: robust consumer protections including consumer privacy and security, strict KYC compliance, adherence to local laws and regulations, and stability as a means of payment.
MasterCard noted that it is “actively engaging with several major central banks around the world” to support central bank digital currencies (or CBDC’s).
The announcement also reported rising demand for cryptocurrencies among customers, noting that users have been buying crypto assets with their MasterCard’s amid the current bull market.
They concluded: “Digital assets are becoming a more important part of the payments world.”
The company hasn’t been sleeping at the wheel on cryptocurrencies though. In fact, they’ve already devoted resources to exploring digital ledger technology, holding 89 blockchain patents with a further pending 285.
The payments provider has worked with Wirex and BitPay to create crypto cards – but no cryptocurrencies are moved directly through MasterCard’s network as yet.
MasterCard’s announcement is the latest of a series of institutional adoption of cryptocurrencies that have come in the last few weeks. This week Tesla announced a purchase of $1.5 billion Bitcoin from its cash reserve adding that it will soon accept Bitcoin payments for its products.
Paypal and Visa also made the headlines recently, both reiterating their commitments to developing the space further.
Most recently, speculation has also emerged on whether Apple will follow in Tesla’s footsteps, with the Royal Bank of Canada telling Apple to develop a crypto exchange that would create further growth.
A payment processor endorsement effect?
While we’re in the mood for speculating on possible cause and effect scenarios, it’s worth considering that bitcoin rallied after payment giants PayPal and Visa announced support for crypto.
Since PayPal launched support for cryptocurrencies on October 21st 2020, bitcoin rallied 252%. On January 30th, Visa’s CEO also revealed that the firm will rollout cryptocurrency support in the company’s payment network. Since then, bitcoin rallied another 40%.
Now that MasterCard have revealed their crypto plans, could the payment processor endorsement effect be about to repeat itself?
Time will tell.
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