– 4 Key things MasterCard will put in check before giving support to any coin.
MasterCard Incorporated has announced that it will start supporting cryptocurrencies transactions directly on its network in 2021.
The American multinational financial services corporation headquartered in New York, United States, announced this in a post on its website on Wednesday via the Executive Vice-president for digital assets, block chain products and partnerships, Raj Dhamodharan.
In the post, Raj Dhamodharan said that the company is preparing for the future of crypto and payments as they are becoming an important part of the payments world.
“We are preparing right now for the future of crypto and payments. This year Mastercard will start supporting selected cryptocurrencies directly on our network. This 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.”
Speaking on the company’s philosophy, he said,
“Our philosophy on cryptocurrencies is straightforward: It’s about choice. Mastercard isn’t here to recommend you start using cryptocurrencies. But we are here to enable customers, merchants and businesses to move digital value – traditional or crypto – however they want. It should be your choice, it’s your money.
“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.
“We are here to enable customers, merchants and businesses to move digital value — traditional or crypto — however they want. It should be your choice, it’s your money.”
Stating MasterCard’s reason for its support for selected Cryptocurrencies, he said,
“To be completely clear, not all of today’s cryptocurrencies will be supported on our network.
“While stable coins 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 will 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 stable coins that we expect to bring into our network.”
In addition, he listed four key items, MasterCard will put in check before giving support to any coin.
“First and foremost we need consumer protections, including privacy and security of consumers’ information — the same level of security people have come to expect in their credit cards.
“Next, strict compliance protocols will be needed, including Know Your Customer, a requirement meant to snuff out illegal activity and deception in payment networks.
“Also, these digital assets must follow local laws and regulations in the regions they are used.
“Lastly, people will want to use these digital assets for payments, so that is one of our criteria too. To reach our network, crypto assets will need to offer the stability people need in a vehicle for spending, not investment.”
Furthermore, Raj disclosed the company’s hard work in providing consumers with choice of Cryptocurrencies.
“We teamed up with Wirex and BitPay last year to create crypto cards that allow people to transact using their cryptocurrencies. We added to those partnerships this year by joining forces with LVL, an up-and-coming cryptocurrency exchange. These relationships — with many more planned in the pipeline — build on our many years of crypto collaborations.” He stated.
He also disclosed MasterCard’s active engagement with several major central banks around the world, as they review plans to launch new digital currencies, dubbed CBDCs, to offer their citizens a new way to pay.
However, MasterCard noted that “In all of these cases, cryptocurrencies still don’t move through our network. Our crypto partners convert the digital assets on their end to traditional currencies, then transmit them through to the Mastercard network. “
In conclusion, he noted that “With 89 block chain patents granted globally with an additional 285 block chain applications pending worldwide, we already have one of the payments industry’s biggest block chain patent portfolios to draw from to make these projects successful.”