In an official announcement, MasterCard made an announcement on October 17, 2022, about a new program that will allow financial institutions to offer their customers the ability and service to trade cryptocurrency. It is expected that the program will act as a connection between crypto trading platform Paxos and banks, according to the company. Additionally, MasterCard will also be handling regulatory compliance and security issues, two non-negotiables for banks interested in offering crypto trading services as part of their offerings.
In collaboration with Mastercard, the program is aimed at enabling users to buy, hold, and sell cryptocurrencies as well as providing them with additional security and compliance through Mastercard’s proprietary Crypto Secure solution. A new tool that will be developed by Mastercard in collaboration with Paxos Trust company, the company that is currently Mastercard’s partner, is scheduled to be launched during the fourth quarter of 2022. Paxos is known for providing similar technology to PayPal, one of the world’s leading payments companies, which launched its first cryptocurrency services towards the end of 2020. By forming this partnership, Paxos will be providing cryptocurrency asset trading, custody, and related services to banks, while Mastercard will be integrating its technology into bank interfaces to make cryptocurrency trading much easier for them.
Mastercard’s president of cyber and intelligence, Ajay Bhalla, highlighted the company’s growing expertise in cryptocurrency as well as its commitment to the cryptocurrency market by mentioning the company’s cryptocurrency-oriented investments. A Mastercard survey released in 2022 indicates that 29% of respondents worldwide hold cryptocurrency as a form of investment, and another 65% are preferring their current financial institution to provide cryptocurrency services. This is based on the information gathered in the Mastercard 2022 New Payments Index. Paxos’ head of strategy, Walter Hessert, emphasized that Mastercard is a global network of financial institutions with over 2,000 branches around the world.
As regulation comes in, there is going to be a higher degree of security available to the crypto platforms, and we’ll see a lot of the current issues getting resolved in the quarters in the years to come.
Jorn Lambert, Chief Digital Officer – MasterCard
Additionally, Mastercard’s move will likely increase competition with exchanges such as Coinbase and FTX, which have gone on buying sprees in an effort to consolidate the crypto industry in the wake of the collapse of big players including Voyager Digital, a crypto broker, and Celsius Networks, a crypto lender.
We’re excited to build on our long-term partnership with Paxos–co-innovating to bring safe and secure technology to financial institutions, Our crypto product innovations will provide choice at scale and continue to bring one-of-a-kind opportunities to financial institutions as they seek to offer new, advanced services to their customers.
Jorn Lambert, Chief Digital Officer – MasterCard
