Mastercard is revamping its card program for cryptocurrency wallets and exchanges in an effort to make it simpler for partners to convert cryptocurrency to traditional fiat currency.
The card network is partnering up to test new capabilities that will enable banks and crypto companies to offer new card options that allow users to spend their crypto assets anywhere Mastercard is accepted. The company is working with Evolve Bank & Trust and Paxos Trust Company, a blockchain infrastructure and regulated stablecoin issuance platform and Circle, the principal operator of the USD Coin (USDC).
Mastercard’s new offering aims to solve a key problem: When people spend cryptocurrencies such as Bitcoin, Bitcoin Cash, Ether, or Litecoin, today, the transaction must enter and settle on Mastercard’s network as traditional fiat currency, such as the U.S. dollar. This makes it operationally challenging for crypto providers to perform currency conversion.
Under the terms of the partnership, Paxos and Circle will use their platforms to facilitate the conversion of crypto to fiat through fiat-backed stablecoins, a class of cryptocurrency that offers price stability and is backed by reserve assets. This, in turn, will simplify the process, allowing more banks and crypto partners to offer their customers the choice of paying with cryptocurrency.
“Today not all crypto companies have the foundational infrastructure to convert cryptocurrency to traditional fiat currency, and we’re making it easier,” said Raj Dhamodharan, executive vice president of digital asset and blockchain products & partnerships at Mastercard. “Through our engagement with Evolve, Paxos, Circle and the larger digital assets community, Mastercard expects to deliver on our promise of consumer choice to provide options to people around the world on how and when to pay.”