Mastercard looks to push crypto cards mainstream

Karthik Subramanian

Mastercard is looking to push the crypto cards, that it has launched, mainstream by removing the burden of conversion into fiat currency through tie-ups with major crypto firms.

mastercard

Mastercard by itself has not made much effort so far to accumulate cryptos and that is probably sometime down the line but for now, the company seems to be content in tying up with crypto firms like Circle, Paxos, etc. Though Mastercard has been ready to issue crypto cards, the uptake so far has been low from the card issuers due to difficulty over settlements into fiat for merchants and card issuers as well.

When a user makes a payment using a crypto card, it is likely that the user is well versed with the crypto world and could settle using cryptos or even fiat as well, when the time comes for him to make the monthly payment. But for merchants, especially those who are not used to cryptos, it can be a huge burden when the time comes for fiat settlements as they would not know how and where to make that conversion. Unless this network and process flow becomes clear for all, cryptos and crypto cards cannot move mainstream.

Mastercard has been trying to settle this problem through tie-ups with Circle and Paxos and doing conversion of cryptos to fiat for settlements or for settlements in cryptos itself, which is likely to be the ultimate aim. This is pretty much similar to what it does currently as well as it issues cards in several countries with different currencies and the conversions and the settlements have to happen with the local currency in each country.

The company has not revealed what cryptos are being used for settlements as yet and what other cryptos would be added later on but it would need to rely on stablecoin settlements as it cannot afford to settle in cryptos that keep varying in value every day. This is why stablecoins are likely to be the ones that lead the crypto industry into the mainstream rather than bitcoin or ethereum, as was long expected.

The use case for stablecoins as a payment method both for settlements and also for mainstream users is much stronger than any other crypto that is volatile and this is further reflected in the challenges that Mastercard and other companies face while doing settlements. Mastercard continues to push on with its Crypto Card program across its network which means that crypto would need to be used all along the chain, from the company to the issuers and the users.

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