Why Mastercard will start to support cryptocurrencies directly on its network

Mastercard has announced that it will start to support select cryptocurrencies on its network to give customers and merchants more options.

The news comes after a year that has seen digital assets like bitcoin soar to record levels, in no small part thanks to support from celebrities like Elon Musk, growing acceptance among investors and due to the ongoing pandemic making people look for safe gold-like assets to put their money into.

“Whatever your opinions on cryptocurrencies – from a dyed-in-wool fanatic to utter sceptic – the fact remains that these digital assets are becoming a more important part of the payments world,” said Raj Dhamodharan, executive vice resident of digital asset and blockchain products and partnerships at Mastercard, in a statement.

“We are seeing this fact play out on the Mastercard network, with people using cards to buy crypto assets, especially during bitcoin’s recent surge in value. We are also seeing users increasingly take advantage of crypto cards to access these assets and convert them to traditional currencies for spending.”

Mastercard will begin to allow cryptocurrencies on its network later this year and will only allow digital assets that pass its screening process.

To be accepted onto the network, cryptocurrencies must meet standards for protecting the privacy and security of consumers’ information.

The digital assets must also have strict compliance protocols, including know your customer structures, and ensure that they follow local laws and regulations.

There must also be a demand from people to use these cryptocurrencies to make payments.

“To be completely clear, not all of today’s cryptocurrencies will be supported on our network,” said Dhamodharan.

“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.

“We expect consumers and the ecosystem as a whole will start to rally around the crypto assets that offer reliability and security. It’s those very same stablecoins that we expect to bring into our network.”

Mastercard teamed up with Wirex and BitPay in 2020 to create crypto cards that allow people to transact using their cryptocurrencies. The payments giant has also inked a deal with crypt exchange LVL.

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