Mastercard is preparing to give businesses the option to get paid in cryptocurrency this year.
According to insider sources, the plan is to have Mastercard customers’ crypto payments settled in crypto at certain merchants. The payment giant has not yet said which cryptos it plans to support.
These details come after new CEO Michael Miebach gave a Q4 promise to integrate crypto-currency payments “directly on Mastercard’s network”, during his first earnings call on Jan. 28. He said this change will give flexibility to both merchants and customers.
In the past, Mastercard supported some cryptocurrency through its partners Uphold and Wirex. But those systems converted the coins into fiat currency before reaching the merchant.
The new program could change everything for businesses who opt in. They will be able to operate outside the fiat ecosystem entirely.
Although that is hardly a safe bet given that most bitcoin (BTC, +3.66%) owners see their coins as investments, not currencies. And the insider source stressed there’s no guarantee Mastercard’s new initiative will even support bitcoin.
Instead, cryptos will be selected using Mastercard’s “Principles for Blockchain Partnerships” framework. Released after Mastercard’s Libra exit, the document put a focus on consumer protection, stability, and regulatory issues in selecting potential crypto partners.
“Most of today’s 2,600 digital currencies do not meet these criteria,” Mastercard stated.
Very few merchants currently accept digital currencies. Tesla’s plans to sell vehicles for bitcoin remains hypothetical. And a large crypto economy is not yet a reality.
But Mastercard is creating the foundation with years of patents in the digital currency area. The company has said it has 89 blockchain patents and is awaiting approval on another 285.
The payments industry is working rapidly to support blockchain-based currencies. PayPal has said it plans to roll out bitcoin payments later in 2021. While Visa’s CEO says they might add crypto payments sometime in the future.