American multinational financial services corporation; MasterCard has announced plans to begin support for digital currency (also known as cryptocurrencies) transactions directly on its network.
The payments giant intends to make the option to receive payments in cryptocurrency available for its merchants later on this year.
According to Coin Desk a source who is familiar with the development revealed that the move will make it possible for customers of MasterCard have their digital currency payments or transactions, settled in cryptocurrency at all merchants who participate. This is a first for the financial services corporation.
MasterCard has however not yet revealed which of the numerous digital currencies available today, will be support on its network and where.
The announcement has given a lot more context to MasterCard’s Chief Executive Officer (CEO); Michael Miebach’s pledge in Quarter 4 to integrate digital currency payments “directly on our network” a decision which the Chief Executive Officer (CEO) who announced his first earnings on the 28th of January 2021 believes will lead to the highest flexibility for merchants and customers alike.
MasterCard had in the past, provided limited support for Cryptocurrency transactions via its crypto card partnerships with Uphold and Wirex. Those partnerships however, only catered to payments and not settlements with the cryptocurrencies being converted to fiat currencies first before reaching the merchants.
The new functionality once implemented, will switch up the dynamic with businesses and store owners who get on board. This is because they will now be able to properly carry out their business transactions outside the confines of fiat currencies and their ecosystems provided their customers have cryptocurrencies that they are looking to spend.
Customers being willing to spend their cryptocurrencies as payment for goods and services is a 50-50 thing because of the buy and hold strategy that is quite popular in the world of cryptocurrencies. Bitcoin buyers for instance mostly look at their Bitcoins and Satoshis as investments and not tools to be used for payment except in emergencies or dire situations.
It is not currently known whether or not the crypto settlement initiative by MasterCard will also support Bitcoin.
Coin Desk revealed that according to a source the selected cryptocurrencies will be assessed according to MasterCard’s 2019 “Principles for Blockchain Partnerships” framework.
The “Principles for Blockchain Partnerships” document which was released after MasterCard left Libra, focused on regulatory compliance in vetting all potential partners, protection of consumers, as well as an emphasis on stability. The company at the time stated that, “Many of today’s 2,600 digital currencies today fail to do this.”
The Executive Vice President for Blockchain and Digital Asset Products at MasterCard; Raj Dhamodharan via a blog post implied that stable coins will be the major beneficiaries of the soon to be implemented integration by MasterCard.
According to Raj Dhamodharan, “Our philosophy on cryptocurrencies is straightforward: It’s about choice. Mastercard isn’t here to recommend you start using cryptocurrencies. But we are here to enable customers, merchants and businesses to move digital value.”
The number of merchants who currently accept cryptocurrencies like Bitcoin are very few. This means the widespread adoption of cryptos, still has quite a long while. Even Tesla’s plan to accept Bitcoin as payment for its products, is yet to be implemented.
MasterCard has over the years created the foundation for a future where cryptocurrencies will be widely accepted. The company achieved this by securing a number of patents that will be vital in the Digital currency world.
MasterCard also made it known that it is for 285 of its patents across the world to get approval and currently has a total of 89 blockchain patents.
Some of the multinational financial services company’s patent filings in the United States include methods to keep transactions having to do with cryptocurrencies private, how to deal with refunds in cryptocurrencies, processing of Blockchain payments instantly, verification of on chain credit card payments, as well as other patents.
In 2013 MasterCard filed a patent for Bitcoin payments for the first time, but later scrapped that move in 2015. After that it started hiring a team of cryptocurrency professionals and wallet developers in 2019. It now has a platform that makes it possible and easy for central banks to test out digital currencies.
The payments industry is rapidly gearing towards supporting currencies that are based on blockchains. The industry is doing so at a speed that has not been seen in a while. Not since Bitcoin first initiated the concept of peer to peer immutable transactions that are also stateless in 2009.
Online payments system; PayPal, is also planning to implement a Bitcoin payment feature later in the year.
The Chief Executive Officer (CEO) of Visa Al Kelly, revealed that the company might also include cryptocurrency payments in the future.
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