Mastercard announced it will enhance its card program for cryptocurrency wallets and exchanges. This will make it simpler for partners to convert cryptocurrency to traditional fiat currency.
Mastercard and its partners are testing enabling more banks and crypto companies to offer a card option to people wanting to spend their digital assets anywhere Mastercard is accepted. These partners include Evolve Bank & Trust and Paxos Trust Company, a leading blockchain infrastructure and regulated stablecoin issuance platform, and Circle, a global financial technology firm. Circle is also the principal operator of the USD Coin (USDC), a dollar digital currency or stablecoin.
“The collaboration between Circle and Mastercard demonstrates that dollar digital currencies like USDC play a foundational role in making payments more efficient and can facilitate new economic activity for businesses worldwide,” said Dante Disparte, Chief Strategy Officer and Head of Global Policy at Circle.
Currently, cryptocurrency transactions must enter and settle on Mastercard’s network as traditional fiat currency, such as the U.S. dollar. That means until now, crypto providers who had been planning to launch or expand card programs could have found it operationally difficult to perform the currency conversion.
This is a critical step preceding the settlement on Mastercard’s network. However, Mastercard’s engagement with Evolve, Paxos and Circle eases this burden for users across the sector.
In February, Mastercard had said it planned to offer support for some cryptocurrencies on its network later this year. It followed through with this soon after that. In April, Mastercard launched its first crypto rewards card in partnership with US crypto exchange Gemini. Customers could receive up to 3% in bitcoin or other cryptocurrencies on their purchases.
Rival Visa has also increased its network support for cryptocurrencies. Visa launched its own crypto rewards card with crypto services company BlockFi. BlockFi Visa Rewards cardholders could earn 1.5% back in bitcoin on every purchase. This payout then increases to 2% on every dollar spent over $50,000 annually. Indeed, Visa’s crypto-linked card usage eclipsed $1 billion so far in 2021.