Mastercard to support cryptocurrency on its network
- The company has already teamed up with cryptocurrency players such as Wirex and Bitpay to launch cryptocurrency cards in the past, but those players were converting cryptocurrencies to fiat currencies at their end
Mastercard has announced it will add cryptocurrency to its network. In a blog post on Wednesday, the international payments major indicated that it will give preference to 'stable coins' or cryptocurrencies that are linked to fiat currencies like the dollar.
"Whatever your opinions on cryptocurrencies — from a dyed-in-wool fanatic to utter skeptic — the fact remains that these digital assets are becoming a more important part of the payments world," the post said. "We are preparing right now for the future of crypto and payments, announcing that this year Mastercard will start supporting select cryptocurrencies directly on our network," it added.
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According to Mastercard, stablecoins must satisfy four conditions in order to be accepted on its network.
These are firstly consumer protections, including privacy and security of consumers’ information. Second, strict compliance including Know Your Customer, a requirement meant to snuff out illegal activity and deception in payment networks. Third, digital assets must follow local laws and regulations in the regions they are used. Fourth, crypto assets will need to offer the stability people need in a vehicle for spending, not investment.
The company has already teamed up with cryptocurrency players such as Wirex and Bitpay to launch cryptocurrency cards in the past, but those players were converting cryptocurrencies to fiat currencies at their end, the post added. "Our change to supporting digital assets directly will allow many more merchants to accept crypto — an ability that’s currently limited by proprietary methods unique to each digital asset," the blog post said. The Mastercard move follows an announcement by PayPal in 2020 allowing users to hold cryptocurrency in their wallets. More recently, Tesla announced a $1.5 billion purchase of Bitcoin and announced plans to accept payments in bitcoin.
The move is likely to complicate the Indian government's proposals to ban private cryptocurrencies. On 9 February, speaking in the Rajya Sabha Minister of State for Finance Anurag Thakur said that a law on the subject is being finalised and will shortly be sent to the Union Cabinet.
The cryptocurrency industry in India has launched an online initiative called 'IndiaWantsCrypto' to build public support in favour of the digital asset in India.
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First Published:11 Feb 2021, 10:09 AM IST
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