Mastercard has announced plans to support cryptocurrencies in 2021, paving the way for nearly 1 billion users to spend digital assets at more than 30 million merchants.
The company believes this could open up merchants to new customers and build loyalty with existing customers who are already migrating to digital assets over traditional options.
“It’s a matter of choice. MasterCard is not here to recommend you to start using cryptocurrencies. But we are here to enable customers, merchants and companies to transfer digital value.”
While the global payments giant has indicated that it plans to support stablecoins due to their “reliability and security”, Mastercard has refused to name any specific cryptocurrencies it will incorporate.
However, MasterCard has introduced four primary criteria by which potential assets will be evaluated: robust consumer protection including consumer privacy and security, strict compliance with KYC, adherence to local laws and regulations, and stability as a method of payment.
MasterCard also indicated that it is “actively partnering with several major central banks around the world” to support the central bank’s digital currency initiatives, or CBDCs.
Last year, the company released a “Default Protection Mode” tool to demonstrate how CBDC is used to settle consumer purchases using the MasterCard infrastructure.
MasterCard also reported an increased demand for digital assets among its customers, indicating that many users are buying crypto assets with their MasterCard amid the current bull market.
Mastercard concluded that “digital assets have become a more important part of the payments world.”
“We are here to enable customers, merchants, and companies to transfer digital value – traditional or crypto – however they want. It should be your choice, it’s your money.”
MasterCard has already devoted significant resources to exploring distributed ledger technology, as the company currently holds 89 blockchain patents while another 285 applications are on hold.
The payment provider has been involved in crypto payments for some time now, partnering with Wirex and BitPay to create cryptocurrency cards, although the cryptocurrencies have not been transferred over the MasterCard network.
The MasterCard announcement is the latest in a string of institutional adoption of cryptocurrencies that have surfaced in the past few weeks. Tesla this week announced the purchase of $ 1.5 billion Bitcoin from its cash reserves, adding that it will soon accept Bitcoin payments for its cars.
Last week, PayPal doubled down on cryptocurrency and announced that it would offer cryptocurrency payments to its 26 million merchants after its limited cryptocurrency trading services exceeded expectations.
One week before that, Visa Chairman and CEO Al Kelly confirmed its commitment to crypto payments and onramps during a first-quarter earnings call.
Speculation about other tech companies that will be next to cryptocurrency is emerging as well, with financial services firm RBC Capital Markets saying Apple should follow in Tesla’s footsteps. RBC analyst Mitch Steves wrote to clients that developing a crypto exchange in the Apple Wallet would create a huge new market for growth.