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Mastercard wants to be the go-to company for governments and private entities when it comes to testing and deploying central bank digital currencies or stablecoins.
Traditional payment networks are competing to keep their services at the forefront of new developments in digital assets, whether they are central bank digital currencies (CBDCs) or private sector stablecoins.
In an earnings call on Thursday, Mastercard CEO Michael Miebach discussed recent developments in crypto and CBDCs, making the pitch that the company was well-positioned to remain a linchpin of intra- and international value flows:
“What we believe we do is bring a perspective to the market as a multi-rail payment provider. We have to be in this space because people are looking for answers.”
Mastercard has been extremely proactive in keeping up with digital currency innovations, owing in part to competition with its rival, Visa. Mastercard announced plans to support cryptocurrency in 2021, allowing its nearly one billion users to spend their crypto at over 30 million supported merchants worldwide.
Earlier this week, the company announced a new startup engagement programme as part of Mastercard Start Path – an accelerator programme aimed at assisting fintechs and businesses working with digital assets, cryptocurrency, and blockchain technology. SupraOracles, a blockchain oracle startup, STACS, a blockchain infrastructure provider, Taurus, a digital asset firm, and Mintable, a marketplace for issuing and trading NFTs, are among the most recent additions.
On the public front, the company has also launched a virtual testing environment to assist central banks in simulating the issuance, distribution, and transactions of CBDCs among multiple parties. The platform is intended for both wholesale and retail CBDC designs, and it provides practical insight into how, among other things, a CBDC could be interoperable with existing payment methods and used to pay for everyday goods and services.
During the earnings call, Miebach stated, “All of these countries must make a trade-off between existing financial product delivery and what a CBDC is solving for, whether it’s financial inclusion or cross-border payments.” We’ve dealt with it all before.”
Mastercard is also not ignoring the stablecoin sector, which has already seen successful currencies such as Circle’s dollar-pegged USD Coin (USDC) and is preparing for the launch of Facebook-affiliated Diem. Miebach confirmed that the company is preparing its network to support stablecoin transactions, provided its issuers meet regulatory requirements and consumer protection and safety standards.
This year, Visa’s CEO has made similarly upbeat remarks about stablecoins, arguing that their blockchains can be viewed as payment rails similar to RPT or ACH networks. Visa is also not afraid of more volatile crypto assets, viewing them as a store of value for which it can still provide fiat on-ramp services.
Eric Grover, principal at Intrepid Ventures, told reporters this week that stablecoins and CBDCs should be “in Mastercard and Visa’s wheelhouse,” and that both card networks should “engage with gusto” in these developments.
Mastercard announced new partnerships earlier this month with Circle, Paxos, Evolve Bank & Trust, and others on a joint project to enable banks and crypto companies to roll out crypto cards that can be used anywhere Mastercard is accepted.