Global payments giant Mastercard announced Wednesday that it was planning to offer support for certain cryptocurrencies on its network, joining a string of big-ticket companies that pledged to tow the same path.
The news however did not come as a shocker as it beamed more light on CEO Michael Miebach’s Q4 pledge to integrate digital currency payments “directly on our network”
The launch of its “proprietary virtual testing environment” for central banks early October last year was enough pointer that the company was already gearing for a full adoption of crytocurrencies on its network.
The announcement by the credit card giant comes days after Elon Musk’s Tesla announced that it had bought $1.5 billion of bitcoin and would soon accept it as a form of payment.
According to credible sources, the recent functionality by MasterCard will see its customers’ digital currency payments settled in crypto at participating merchants, a first for the financial giant. The company however, is yet to disclose which digital currencies it intends to support, or where.
Previously, Mastercard supported limited cryptocurrency transactions through its cryptocard partners Wirex and Uphold. But those programs only cover payment, not settlement; the coins are converted to fiat currency well before reaching the merchant.
In the latest initiative, MasterCard seeks to amend the dynamic among store owners and businesses who opt in. Everyone should be able to transact freely without the limits of the fiat ecosystem using crypto as the currency of payment.
However, given the buy-and-hold mantra that pervades the world’s biggest cryptocurrencies, that’s hardly a safe bet.
Many bitcoin purchasers for example regard their coins as investment instruments, not payment tools. And credible sources have also stressed the fact that there is no assurance that bitcoin would accept Mastercard’s crypto settlement initiative.
Instead, cryptos will be evaluated against Mastercard’s 2019 “Principles for Blockchain Partnerships” framework, reliable sources say. Released in the wake of Mastercard’s libra exit, the document placed emphasis on stability, consumer protection and regulatory compliance in vetting potential partners.
In the words of Raj Dhamodharan, executive vice president Digital asset and blockchain products and partnerships:
“To be completely clear, not all of today’s cryptocurrencies will be supported on our network. While stablecoins are more regulated and reliable than in the recent past, many of the hundreds of digital assets in circulation still need to tighten their compliance measures, so they won’t meet our requirements. We expect consumers and the ecosystem as a whole will start to rally around the crypto assets that offer reliability and security. It’s those very same stablecoins that we expect to bring into our network”
In the statement on its website, the company further explains; “our philosophy on cryptocurrencies is straightforward: It’s about choice”. Stressing that MasterCard is poised to help customers, merchants and businesses move digital value – traditional or crypto – however they want.