For more content like this, from the industry leader in global payments coverage, please visit
After years of only dipping a toe in the waters of crypto payments, Mastercard has dived into the deep end.
While the breadth of its support is still in question,
Mastercard is accepted at
Only
Mastercard referred questions to a public statement from
The card network is additionally seeing more usage of crypto cards to access digital assets and convert them to traditional currencies for spending. Mastercard currently supports crypto payments through
Mastercard's direct in-network crypto support strategy is still unclear. The card brand hasn't decided which cryptocurrencies it will accept, and it won't start processing crypto payments until later this year. While not overtly saying Mastercard would not allow cryptocurrencies like bitcoin and ether, Dhamodharan's statement suggests stablecoins — which avoid bitcoin's volatility by pegging their value to a government-issued currency — will be a big part of Mastercard's mix.
Dhamodharan's statement stresses Mastercard is looking for cryptocurrencies that can be used for payments more than as an investment. Visa CEO Al Kelly also recently suggested stablecoins would be of interest. Processing stablecoin transactions would enable Visa and Mastercard to support central bank digital currencies and private-sector initiatives such as the Facebook-affiliated Diem.
Mastercard's decision closely follows
Tesla's announcement also showcased the volatility of currencies like bitcoin — a factor that has made many merchants wary of accepting it.
"It's undoubtedly an encouraging sign to see Mastercard announce plans, but any real tipping point will be when they roll out the feature and we can see their customers using cryptocurrencies and digital assets for the first time," said John Wu, president of Ava Labs, a decentralized finance technology company. "That is where we'll see demand, and the product market fit for crypto within a cornerstone payments infrastructure."
Mastercard is working with central banks that are developing digital currencies and is using a test platform for central bank digital currency pilots.
"While stablecoins 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 won't meet our requirements," Dhamodharan said, adding consumers will rally around crypto assets that offer reliability and security.
Both Visa and Mastercard have been laying the technology groundwork to support crypto payments.
"We already have one of the payment industry's biggest blockchain patent portfolios to draw from to make these projects successful," Dhamodharan said.