MasterCard Exploring New Ground In The Crypto Market

[TL;DR]

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The financial sector continues to expand daily.

The wide acceptability of blockchain technology for investment and exchange has continued to grow the financial services.

Blockchain platforms' advantage over other financial services makes it a toast.

Several Partnerships and collaborations have continued to spring up between other financial service providers and the blockchain platforms.

One of those foremost partnerships is MasterCard trying to explore new grounds in the crypto market.

MasterCard does not have a banking division; they mainly partner with banks, airlines, hotels, and retailers.

In recent times, MasterCard has partnered with Bakkt and Consensys.


The financial sector and its industry players continue exploring ways to improve investment, financial exchange, lending and borrowing, management of money and other assets.

The introduction and general acceptability of blockchain as a financial service gave the industry a promising future.

Blockchain technology was perceived as a path to faster exchange, automated transactions, and advanced security.

All these incentives endeared financial services giants to start keying into the crypto market. MasterCard is at the forefront of this partnership between the blockchain network and financial service providers.

How MasterCard's Journey Into The Crypto Market Started

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MasterCard CEO Micheal Miebach said he wants his company to develop products and services around cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs). He further emphasized that he wants MasterCard to play all three digital assets.

The statement was extensive and gave a hint that MasterCard is already designing products and services that will enable individuals to connect their cryptocurrency wallets to the MasterCard network through a gateway. The proposed gateway will ease the conversion of the crypto into fiat.

The collaboration is expected to produce crypto applications and services. These applications and services will make it easier for the customers to access their crypto wallets and make transactions using MasterCard.

Before examining the collaborations and other steps that MasterCard is taking to explore new ground in the crypto market, it is pertinent to identify what MasterCard is and what they are out to achieve.

What Is MasterCard?

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MasterCard is a financial service corporation with coverage in over 120 nations across the globe. MasterCard is a multinational corporation famous for processing payments between financial institutions, banks of merchants, and card-issuing banks.

MasterCard allows credit units and purchasers in the financial sector to issue brand debit, credit, and prepaid cards to their customers. Since 2006, MasterCards has continued to issue cards for purchase alongside other financial services.

The history of MasterCard is quite encompassing. It started as an interbank card association in 1966 and 1979; it metamorphosed into MasterCard.

Over the years, the global financial institution has continued to change its nomenclature. It was first known as "Interbank" from 1966 to 1969, and it changed to "Master Charge" in 1969 and adopted the name till 1979.

MasterCard has coverage all over the world except in Russia and China. As of 2021, its revenue was estimated at $18.88 billion. In 2020, the financial service reported $6.3 trillion worth of gross dollar volume. This amount shows the number of transactions that MasterCard is used for across several sectors and payment platforms.

You should know that MasterCard is a payment network processor. MasterCard's financial service partners with financial institutions that issue and allow MasterCard payment.

Anywhere the MasterCard brand is accepted, you can use the Card for transactions. Other major card processors with global coverage include Visa, American Express, and Discover.

MasterCard does not have a banking division; they mainly partner with banks, airlines, hotels, and retailers. These partners are the issuers that determine the terms and benefits that a cardholder is entitled to.

How MasterCard Explored New Grounds In The Crypto Market

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The Vice President (digital partnerships) of MasterCard, Sherri Haymond, granted an interview and revealed that “Our partners, be they banks, fintech or merchants, can offer their customers the ability to buy, sell and hold cryptocurrency through an integration with the “Baktt platform.”

Experts believe that this statement will expand the way Americans and users of MasterCards across the globe earn and spend their cryptocurrencies.

With over 2.8 billion users of MasterCard spread across the globe, the partnership with Bakkt witnessed an increase of 234% in shares. Bakkt started trading as a public company a week before the partnership.

According to Sherri Haymond, the partnership will allow MasterCard to provide crypto wallets and cards for banks. The wallet and Card will allow the holder to transact directly with the Card from their crypto wallet.

Instead of converting from crypto to fiat, you will be able to make financial transactions directly at any store that supports MasterCard payment.

The CEO of Bakkt, Gavin Micheal, added that the partnership with MasterCards will enable merchants, retailers, and restaurants to offer rewards in Bitcoin. In addition, existing points of payment will be converted into crypto at a generally accepted rate.

The expansion of Mastercard to explore the crypto market will be beneficial to hotel and airline users. You will be able to convert the points and rewards you earn after several trips using an airline or staying in a hotel into Bitcoin or other acceptable digital currencies on the blockchain.

Another collaboration towards exploring new ground in the crypto market is the partnership between MasterCard and Consensys.

Consensys is a software engineering firm in the blockchain space that provides infrastructure and services to support Ethereum. Consensys is an existing open-source protocol layer and the point of access for developers.

The shift of financial services to blockchain necessitated the partnership between Consensys, a blockchain protocol, and MasterCard, a global payment service.

Conclusion

It is essential to know that the venture of MasterCard into the crypto market does not mean that the digital assets and cryptocurrencies will move through the MasterCard network.

The partnership will only ensure ease of payment and transfer of cryptocurrencies from your wallet using your MasterCard.

In addition, MasterCard will support merchants and retailers to accept cryptocurrencies directly and eliminate conversion from crypto to fiat during transactions.

In all these collaborations and partnerships, MasterCard puts customer protection, compliance, and privacy of consumers’ information at the forefront.



Author: Valentine A. , Gate.io Researcher
This article represents only the researcher's views and does not constitute any investment suggestions.
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