The cryptographic space lit up on Wednesday night, when news that Mastercard was expanding the scope of its support for digital currency was released.
Mastercard said in a blog post that it is moving to allow its systems to facilitate payments in the form of stablecoins directly to merchants who choose to accept them. This service will complement Mastercard’s existing offerings with a focus on cryptography, whereby consumers can spend their cryptocurrencies through an issuer card – although, in the end, the transaction is settled outside Mastercard and in the form of currency fiduciary, like the US dollar.
The payments company’s chief financial officer, Sachin Mehra, discussed expanded offers during a virtual event organized by Goldman Sachs on Wednesday, according to a published transcript obtained by The Block. But more broadly – and perhaps more importantly – Mehra provided a clear analysis of how Mastercard sees what he called “subcategories” of digital currencies: cryptocurrencies, fiat-backed stablecoins and central bank digital currencies, or CBDCs.
Mehra called cryptography “a class of assets”, adding, “It is not a means of payment as far as we are concerned.” He spoke about Mastercard’s cryptographic card program and indicated that such efforts would continue and increase over time. “We are seeing huge growth in that space,” said Mehra, saying later:
“So that’s it – and we have a number of deals on that, which are already underway. And we’re going to continue to do more and more because people want to be able to use that asset class to make payments at the point of sale.”
On the subject of stablecoins, Mehra noted that “we have plans to enable them, with regulations pending, in our network”.
Mehra continued:
“In other words, handing over these stablecoins and allowing these stablecoins to be settled with merchants who wish to establish themselves in these stablecoins progressively. So we are enabling our network to allow this to happen later this year.”
Finally, Mehra addressed Mastercard’s work in the area of CBDCs, perhaps a little more theoretical, as these coins are still in their initial stages. Even so, large and small payment companies seem to be positioning themselves as possible service providers if they take off – PayPal is one of them, according to statements by the company’s leadership – and it appears that Mastercard is no exception.
“We can bring the technology,” said Mehra. “We have – we are the leaders – one of the leaders in terms of patents that we have developed in terms of DLT. And how can we help [central banks] at the level of infrastructure and / or level of application and services is something with which we remain engaged in several [fronts] with several central banks. “
Mehra concluded his comments by calling the larger crypto-sphere “a place to keep an eye”.
“I think it will fade and flow depending on the flavor of the day when it comes to cryptocurrencies. We have seen soaring crypto prices in the past. But in general, the use of digital accounting technology is something that we will remain focused on. “
A potential conclusion from Mehra’s comments is that, while Mastercard is interested in capturing value around interest in cryptocurrencies, the payment company considers stable currencies to be worth the investments needed to integrate them into its systems. And as for CBDCs, they remain on the horizon – although one day it may constitute an entirely new line of business.
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