Mastercard will help banks get the green light to offer crypto trading services.
Crypto trading with Mastercard and banks
Electronic payments giant MasterCardwhich has been developing its platform for some time to offer services with cryptocurrencies, will help large banks that want to get the green light to offer their customers the possibility of trading digital assets.
The payments giant will serve as a “bridge” between banks and Paxos, a cryptocurrency trading platform already used by PayPal. Mastercard’s program will address regulatory compliance and security, two top reasons cited by banks for avoiding the asset class.
Jorn LambertChief Digital Officer at Mastercard, said:
“There are a lot of consumers who are really interested in this and intrigued by crypto, but would feel much more confident if these services were offered by their financial institutions. It’s still scary for some people there.
According to the first rumors reported by the American media, the new program will be announced next Monday. The service should be called Crypto Source, and it will be much easier for banks and other financial institutions to offer cryptocurrency trading.
It is a service that many banks and financial institutions will surely appreciate, given the significant increase in demand for crypto services among retail customers.
The Mastercard New Payments Index 2022 recorded that around 29% of respondents at the level, would already have cryptocurrencies in their wallet as a form of investment. Another 65% of the sample would indicate a preference for cryptocurrency-related services provided by their current trusted financial institution.
Also according to early rumors, the new service will partner with specific regulated and licensed cryptocurrency custody service providers. This arrangement would make it easier for interested banks and financial institutions to obtain permission to offer trading services to customers.
Mastercard partners with Paxos
This new Crypto Source offer will also include Mastercard Crypto SecureTM to bring additional security to the crypto ecosystem and support card issuers in their compliance with complex regulations.
Mastercard’s main partner in this project will be the Paxos platform, already used by PayPal, to offer services similar to those already offered by Paypal, which offered the possibility of making payments in Bitcoin since last November.
Paxos’ service offers a range of products that allow businesses to integrate the buying, selling, holding and sending of cryptocurrencies into their applications. Paxos Crypto Brokerage is an easy-to-integrate API-based turnkey solution that provides access to 200 billion dollars cryptocurrency market while managing the underlying regulatory and technological complexity.
Since June, the electronic payments giant enabled its US and UK customers to transfer Bitcoin and Ethereum funds from their wallets to external wallets. From now on, Mastercard will also offer a similar service. In addition to technology and partnership support to enable the buying, holding and selling of select cryptocurrencies, the service will also include security management, including Mastercard’s identity solutions, cryptanalysis, transaction monitoring and anti-money laundering.
Paxos CEO Charles Cascarille said:
“With Paxos Crypto Brokerage, businesses can leverage our expertise and regulatory compliance to easily and securely integrate crypto into their applications. We are proud to offer a financial market infrastructure that supports an open and digital financial future.
Ajay BhallaPresident, Cyber & Intelligence at Mastercard, said:
“At Mastercard, trust is our business. What we are announcing today is a connected approach to services that will help bring users securely into the crypto ecosystem. Our recent investments in this area, such as the acquisition of CipherTrace and Ekata, provide us with a unique set of capabilities to help provide our customers and consumers with the most technically advanced solutions available on the market.
Walter Hesserton the other hand, the Head of Strategy of Paxos, revealed:
“Mastercard has a powerful network of financial institutions around the world. This exciting offering developed by Paxos and Mastercard will provide FIs with the fastest and most reliable way to deliver safe and reliable crypto access to their consumers around the world. We are excited to partner with Mastercard to further accelerate the widespread adoption of digital assets.
The new service
According to Jorn Lambert, Mastercard’s Chief Digital Officer, this new service could significantly increase the company’s core business. The service will provide a powerful tool in the hands of financial institutions to be able to manage crypto assets more securely, while striving to be as strict as possible with current regulations.
Despite the fact that the market is going through a very difficult period, most stocks having lost more than 50% of its valuethat does not mean that his untimely end can be predicted.
During an interview two days ago with CNBC, he said:
“It would be myopia to think that a bit of crypto winter heralds the end of it – we don’t see it. As regulations come into effect, the degree of security available to crypto platforms will be higher and we will see many current issues being resolved in the quarters of years to come.
As mentioned, this is another important step towards greater adoption of cryptocurrencies by e-payment giants. Not only Mastercard but also Visa have been experimenting with crypto services for quite some time. Last week, Visa launched a Partnership with FTX cryptocurrency exchange to offer crypto debit cards in 40 countries and has over 70 crypto partnerships. For its part, American Express has been experimenting for months with the possibility of using stablecoins in its electronic payment network.
These facts show how much the crypto industry questions the collaboration with traditional financial players, even though it was born initially with the idea of overcoming it precisely because of its characteristic of disintermediation. The facts show that the future will certainly lie in close cooperation between the two worlds.