Mastercard will help financial institutions offer crypto
Payments giant Mastercard is taking another step to deepen its involvement in the crypto space, aiming to grow its core business model. The company will launch a program that will help banks and financial institutions offer crypto-based products, according to a CNBC report.
The initiative is one of several ventures by the payment company to integrate crypto into its business model. Mastercard enables millions of people and merchants to use digital assets on their payment rails by exchanging crypto for fiat and vice versa. Their new program will take a similar approach.
Mastercard wants people to overcome their fear of crypto
According to the report, Mastercard will launch a pilot program for its initiative in the first quarter of 2023. The initiative will be available to select banking institutions for the purpose of enabling them to launch crypto trading products.
The program will be extended to other regions and institutions in the coming years. Mastercard will work as a “bridge” alongside Paxos, a trading platform that already offers similar services to companies like PayPal.
In late 2020, PayPal and Paxos announced their partnership to give people in the United States access to Bitcoin and other cryptocurrencies. Partners operate as a bridge between digital assets and investors and manage custody, compliance and security.
The Paxos and Mastercard agreement follows similar terms. According to Mastercard’s Chief Digital Officer, Jorn Lambert, there is significant demand for crypto products. Their program will attempt to remove friction from the process of exposure to these assets.
The payment giant has conducted surveys and other studies to gauge sentiment around cryptocurrencies and concluded that most still want access to these assets. Most people, according to their studies, would prefer to expose themselves through their local bank and other financial institutions.
Thus, Mastercard has decided to respond to this demand with its new initiative. Lambert said:
There are plenty of consumers who are genuinely interested and intrigued by crypto, but who would feel much more confident if these services were offered by their financial institutions. It’s still a bit scary for some people.
Crypto Must Step Through This Gate To Enter The Mainstream
The payment giant will focus on keeping its customers and institutional partners compliant with US crypto laws. In addition, the Company will process and verify transactions and provide a framework with Anti-Money Laundering (AML) and Know Your Customer (KYC) policies.
The Mastercard executive believes that the current downward pressure on the fledgling asset class will not cap its long-term growth. In the coming years, the payments company expects to see an increase in transaction volume of the digital asset class. Lambert added:
It would be short-sighted to think that a bit of crypto winter heralds the end of it – we don’t see it. As regulations come into effect, the degree of security available to crypto platforms will be higher and we will see many current issues being resolved in the quarters of years to come.