Mastercard pledges direct support for cryptocurrencies

The Mastercard payment system планирует this year to open for merchants the ability to accept payments in digital assets directly, without support from crypto-card issuers or processors.

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Raj Dhamodharan, head of the company’s blockchain division, did not name the assets supported by the new service. He explained that the choice would be based on compliance with regulatory and consumer-protection requirements.

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“Digital assets are becoming an increasingly important part of the payments world,” the executive stressed. “This year Mastercard will begin supporting select cryptocurrencies directly in its network. This is a major change that will require a lot of work,” the executive noted.

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The new initiative is designed to give merchants, businesses and other clients of the company an additional option to use crypto in transactions instead of fiat.

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Mastercard stressed that it does not offer any assessment of the move. According to Dhamodharan, such a step would widen the audience by those who already prefer this form of payment and increase loyalty among existing customers.

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The blog hints that stablecoins will be among the supported digital assets. They “have become more reliable and improved compliance with regulatory requirements in recent years.”

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Other crypto-assets must meet four criteria:

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• privacy and security of consumer information;

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• strict adherence to implemented KYC protocols;

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• compliance with the laws of the region of use;

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• price stability to meet the status of a payment method.

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Criteria are described in “Principles for blockchain partnerships”, developed by Mastercard in 2019 after leaving the Libra Association.

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Currently Mastercard, in cooperation Wirex and BitPay, offers limited crypto-asset operations. Cards issued by these issuers convert digital assets into fiat before entering the Mastercard network to the recipient.

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The rollout of the current initiative will allow both consumers and merchants to avoid the need to convert funds to fiat and back during payments. Merchants will be able to fully carry out relationships with their customers outside the fiat system.

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The company notes that 285 applications and 89 registered patents in the field of DLT technology, as well as close cooperation with several major central banks in the framework of launching national digital currencies, indicate that the new project is poised for success.

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Earlier, similar plans in its digital-currency strategy were presented by Mastercard’s competitor — Visa.

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PayPal CEO Dan Schulman promised to open the possibility of using cryptocurrencies in settlements with any of the 29 million merchants “in the coming months.”

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In October, Mastercard CEO Ajay Banga said that the volatility of Bitcoin deters people.

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