Mastercard Inc. said on Wednesday that it would begin allowing merchants to accept some cryptocurrencies on its network later this year, marking the latest adoption of digital currencies by a traditional payments player. “We are here to enable customers, merchants and businesses to move digital, traditional or crypto value, however they want,” Mastercard Executive Vice President of Digital Assets Raj Dhamodharan said in a blog post.
Mastercard MA, + 0.23% already works with some crypto platforms that issue Mastercard cards that allow people to spend their crypto assets, but through those arrangements, cryptocurrencies do not flow through the Mastercard network, as crypto partners convert digital currencies into traditional currencies and then transmit them to Mastercard. By moving to support some crypto assets directly, Mastercard “will eliminate inefficiencies, allowing both consumers and merchants to avoid having to switch between crypto assets and traditional to make purchases,” said Dhamodharan. Mastercard plans to be selective about which cryptocurrencies it allows when embarking on its plan. The company will seek cryptocurrencies that respect the privacy of consumer information, follow compliance procedures and “offer the stability that people need in a vehicle to spend, not invest.” Traditional fintech companies are increasingly experimenting with new digital assets. Mastercard, for example, had already revealed that it has held discussions with central banks about the possibility of “central bank digital currencies”, which would serve as alternative forms of payment beyond fiat currency. Mastercard CEO Michael Miebach said in the company’s latest earnings call that Mastercard’s emphasis on consumer protection and transparency, as well as its acceptance network, could prove helpful to central banks as they think about this. future of money. Visa Inc. CEO Al Kelly said in the V for Visa, -0.04%, the most recent earnings call that the company also has deals with platforms and digital wallets that issue Visa cards so customers can spend their holdings. of cryptocurrencies. “These wallet relationships represent the potential of more than 50 million Visa credentials,” he said. Kelly also spoke extensively about the prospects for cryptocurrencies on the Visa platform. “It goes without saying that as a specific digital currency becomes a recognized medium of exchange, there is no reason why we cannot add it to our network, which already supports more than 160 currencies today.” , said. PayPal Holdings Inc. PYPL, -0.36% began allowing US users to buy and sell cryptocurrencies such as bitcoin through its platform late last year, and the company plans to allow consumers to use their crypto balances as financing instruments when you buy with PayPal merchants as soon as this quarter. Square Inc. SQ, -0.24% CEO Jack Dorsey is a huge proponent of bitcoin, and he began allowing users of Square’s Cash app to buy and sell that cryptocurrency more than three years ago.