Mastercard assists banks to offer crypto to their customers
In an interview with CNBC, Mastercard states that it will assist banks in offering cryptocurrency trading to their customers. The payment company is motivated to make it simpler for banks to get involved in crypto so that, more people have access to it.
Mastercard aspires to become a “bridge” between banks and the Paxos crypto trading platform. The latter is already being utilized by PayPal to provide crypto services in the UK.
Mastercard will be responsible for the security and making sure that everything is legal. This is why banks do not want to get involved in crypto.
Many people are interested in crypto.
Cryptocurrencies are constantly changing in value, and there is also the current instability caused by the collapse of Terra LUNA. This has led to a lot of service providers filing for bankruptcy, like Celsius and Voyager Digital.
Even though there are some risks, Mastercard still believes that there are many customers who are interested in cryptocurrencies.
According to Mastercard’s chief digital officer, Jorn Lambert. The survey shows that people still want digital assets even though 60% would rather explore the option through established banks.
During the interview with CNBC Jorn Lambert says:
“Many people are interested in cryptocurrencies but would feel more confident investing if their financial institutions were offering the service. Cryptocurrencies are still a little scary to some people.”
Lambert also states:
“Crypto winter is not the end of cryptocurrency, despite what some people might think. In fact, as regulation comes into play, there will be more security available for crypto platforms and we’ll see a lot of current issues getting resolved in the coming years.”
Banks have staked in crypto but refused to offer it to customers
Big-name investment firms including Morgan Stanley, Goldman Sachs, and JPMorgan. Have set up teams to investigate the crypto sphere but haven’t provided the product to customers yet.
Only last week at an Institute for International Finance event did JPMorgan’s CEO, Jamie Dimon, call cryptocurrencies a “decentralized Ponzi scheme.”
If banks form a partnership with Mastercard like Paxos. It would result in more competition for well-known cryptocurrency exchanges–especially those based in the US, such as Coinbase.
Product test-run takes place in Q1 of 2023
In the first quarter of 2023, Mastercard will introduce a product that follows crypto compliance rules to help with regulation. The product will verify transactions, and provide anti-money-laundering and identity monitoring services.
Although Lambert refuses to state which banks were selected for the pilot, he states that after the trial run is completed. The payment company will make the product available in more locations.
Mastercard is a global technology company that connects consumers, financial institutions, merchants, governments and businesses to fast, secure and reliable electronic payments.
Mastercard operates in more than 210 countries and has over 2 billion cards in circulation. This move marks Mastercard’s latest effort to enter the rapidly growing cryptocurrency industry.
The company also recently joined the Libra Association, Facebook’s proposed digital currency project. As well as joined the Enterprise Ethereum Alliance, an organization focused on using blockchain technology for business purposes.
This announcement also follows Mastercard’s filing of a patent for its blockchain-based payment system back in 2017.
With Mastercard’s assistance, banks can now provide their customers with the option to use cryptocurrencies for purchases. This not only opens up more payment options for consumers but also allows banks to tap into the potentially lucrative cryptocurrency market.
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