Mastercard is bringing cryptocurrencies onto its network

11 Feb 2021262 Views

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The payments giant has said it plans to open up its network this year to certain cryptocurrencies that meet its requirements.

Earlier this week, bitcoin landed back in the headlines when Tesla revealed it had bought $1.5bn in the cryptocurrency. The company also said that it would soon accept bitcoin as payment for its electric vehicles. The news prompted such a spike in trading on cryptocurrencies that exchanges such as Gemini, Kraken and Binance experienced technical difficulties.

Now, credit card giant Mastercard has announced its plans to support certain cryptocurrencies directly on its network later this year.

While Mastercard had allowed its customers to make transactions using cryptocurrencies, this was done without going through the company’s own network. In a statement, the fintech company said supporting select cryptocurrencies directly on its network is “a big change” that will require a lot of work.

“We will be very thoughtful about which assets we support based on our principles for digital currencies, which focus on consumer protections and compliance,” it said.

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“Doing this work will create a lot more possibilities for shoppers and merchants, allowing them to transact in an entirely new form of payment. This change may open merchants up to new customers who are already flocking to digital assets, and help sellers build loyalty with existing customers who want this additional option. And customers will be able to save, store and send money in new ways.”

The company said that not all cryptocurrencies will be supported. “While stablecoins are more regulated and reliable than in the recent past, many of the hundreds of digital assets in circulation still need to tighten their compliance measures, so they won’t meet our requirements.”

Mastercard also said that it is actively engaging with several major central banks as they review plans to launch new digital currencies.

“Last year, we created a test platform for these banks to use these currencies in a simulated environment. Using our deep experience in payments technologies, we look forward to continuing these partnerships with governments and helping them explore the best ways to develop these new currencies.”

Jenny Darmody is the deputy editor of Silicon Republic

editorial@siliconrepublic.com