- The program announced by the giant of global payments will be responsible for facilitating the entry of banks into the cryptographic business.
- Mastercard and the cryptocurrency platform Paxos will take care of covering regulatory and security matters for banks.
- The company believes that there is still an increasing demand for this type of digital asset.
Mastercard announced that it is ready to help banks get involved in trading Bitcoin (BTC) and other cryptocurrencies. The global online payment company will serve as a bridge between the Paxos crypto platform and the financial institutions that want to join this program.
Both Mastercard and Paxos will be responsible for covering the key aspects related to security and compliance with regulations that are of such concern to banks, according to the US CNBC report.
"There’s a lot of consumers out there that are really interested in this, and intrigued by crypto, but would feel a lot more confident if those services were offered by their financial institutions," said Mastercard digital director Jorn Lambert.
Despite the persistent down market for cryptocurrencies this year, the payment giant believes that crypto assets still have a wide range of trading potential given their wide demand.
For Lambert, it’s “shortsighted to think that a little bit of a crypto winter heralds the end of it — we don’t see that.” A recent opinion study determined that 60% of the participants preferred to have some exposure to Bitcoin (BTC) and other cryptocurrencies but through their banks.
Launch of the Pilot Test in 2023
He explained that some people still feel some fear with investments in cryptocurrencies. In his opinion, “it’s hard to believe that the crypto industry will truly go mainstream without embracing the financial industry as we know it.”
Mastercard’s role will be to ensure that banks comply with all regulatory aspects related to crypto. This includes the verification of transactions, as well as offering identity control services and avoiding money laundering.
The pilot test of the new Mastercard product is planned for the first quarter of 2023. After its launch, the company expects to continue driving its growth around the world.
The company did not comment on which banks will be the first to participate in the first stage of the newly announced cryptocurrency trading program.
On the Flipside
- Banks’ participation in the program marks the start of stiff competition for crypto exchanges like Binance, Coinbase, and FTX, which dominate global cryptocurrency trading.
- However, the recent associations between both companies with these exchanges are well known.
Why You Should Care
- Mastercard, as well as Visa, have been increasing their participation in the crypto industry through partnerships with DeFi companies in various regions of the world.
- Rather than considering cryptocurrencies as direct competition, Mastercard is incorporating them into its payment system.