Mastercard wants to open its network for not yet mentioned crypto currencies. And Visa would like to help banks that want to offer their customers Bitcoin & Co.
US credit card provider Mastercard wants to open its payment network for crypto money this year. The digital coins are a clear trend, which is why it wants to open up the new possibilities of these payment methods to customers and retailers, the company explained. Mastercard did not name specific cryptocurrencies.
Mastercard will be very careful when choosing a supported cryptocurrency, it said in a statement instead . The following criteria are decisive: the currencies must have stable value and not be a pure investment vehicle; they also have to provide protection and security for customers and comply with laws and regulations such as user authorization ( KYC ).
Who will be Mastercard’s sweetheart?
Currencies like Monero, which allow anonymous payments, will certainly not be an option in the face of this. But Bitcoin, which always fluctuates strongly in value, is hardly a dream candidate according to these criteria. As early as 2019, Mastercard presented its requirements for “blockchain partnerships” in a communication and already knew then: “Most of the 2,600 digital currencies today do not meet this requirement.”
An obvious candidate: the not yet published Diem, formerly known as Libra . Mastercard says that it sees the greatest potential in stablecoins, i.e. digital money backed by other values such as US dollars. And that is exactly the concept of the Diem coin, which has been heavily criticized by politicians. However: Mastercard left the consortium behind the digital currency in 2019 .
Whichever coin it is, the direct processing of crypto money in the Mastercard network marks a new quality. Mastercard has been working with crypto service providers such as Bitpay and Wirex for a long time – together they offer credit cards with crypto-money payment options. But that works with an intermediate step: the crypto payments are first exchanged by the partners in currencies such as US dollars and only then sent to Mastercard for processing. In addition to these partnerships, Mastercard also points to the collaboration with various large central banks in the development of digital central bank money.
Visa crypto APIs
The project of its major competitor Visa , which was announced in early February, is pursuing a different goal . Visa wants to help banks and other financial service providers who want to offer their customers crypto money but do not have their own infrastructure for it. With “Crypto APIs” one wants to offer a backend to which the financial institutions can easily dock. Anchorage, in which Visa has a stake, is responsible for storing the cryptocurrencies.
First of all, it should go into a pilot test in the USA with Neobank First Boulevard. Visa is talking about the next phase in the digital money strategy; they want to become the network of payment networks. Visa has also had partnerships with companies such as the crypto trading platform Coinbase for a long time.
Increasingly, crypto money seems to be an issue for large companies. This week it was also announced that electric car maker Tesla has invested $ 1.5 billion in Bitcoin and is considering accepting payments in the crypto money. As a result, the Bitcoin price jumped to a new record high. Last October , the payment giant Paypal announced its entry and made it possible for US customers to trade in crypto money and shop online. Many observers also saw this as an important driver of the ongoing crypto money rally.
This post is the first published on citytelegraph.com