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Mastercard’s massive move into crypto is a game changer

26.10.2021

It has been clear for quite some time now that the move toward full acceptance and availability of cryptocurrency via major merchant services companies such as Mastercard and Visa.

This week represents yet another major step in that direction as Mastercard, one of the world’s most prominent merchant services providers has publicly stated that any bank or merchant on its vast network can soon offer crypto services.

Big news is an understatement, and yesterday’s report by CNBC that Mastercard is preparing to announce that any of the thousands of banks and millions of merchants on its payments network can soon integrate crypto into their products demonstrates that a whole new series of possibilities is now opening up to a worldwide audience of retail consumers.

It is without any question or shadow of a doubt that the mainstream adoption of cryptocurrency as a method of payment via companies such as Mastercard and Visa is a natural progression and will open a range of possibilities for participation in the digital financial services environment by all manner of people in all regions of the world.

It is not just Mastercard that has embraced the possibilities of cryptocurrency. Three months ago, Visa, a traditional and risk averse company with the huge responsibility of ensuring security and safety for most payment processing around the world, began to show that cryptocurrency is very much part of its plan by investing in Blockchain Capital, a venture capital company whose targets for funding are cryptocurrency related, as part of the firm’s Fund V.

Visa, along with PayPal, an equally ‘household’ name in the payments business which, although using a different business model to traditional carriers such as Visa, is equally risk averse, have invested alongside other old school companies to a combined total of $300 million.

Mastercard’s development which came to fruition yesterday involves some extremely well versed institutions. In order to go down this route, Mastercard is partnering with Bakkt, which is a division of one of the world’s largest derivatives exchanges, that being IntercontinentalExchange in Chicago.

Back in 2019, IntercontinentalExchange began to provide Bitcoin futures trading via its Bakkt unit which opened its digital-asset custody warehouse on September 6 that year to all customers. Just a week later on September 23, 2019, Bitcoin became able to be acquired.

Currently, IntercontinentalExchange maintains an approximately 68% economic interest and a minority voting interest in Bakkt.

Mastercard has displayed its interest in going all out for cryptocurrency accessibility, and has stated that it wants to ensure that its partners, whether they are retail outlets, banks, or fintech companies can offer their customers the chance to buy, sell or hold cryptocurrencies via an integration with IntercontinentalExchange’s Bakkt platform.

CNBC’s report stated that Mastercard runs one of the dominant global payments networks along with Visa and has relationships with more than 20,000 financial institutions around the world. There are 2.8 billion Mastercards in use.

This means that by offering cryptocurrency through the Mastercard network, the entire method by which people earn and spend cryptocurrencies could be opened up exponentially.

Shares of Bakkt, which is operated as a separate entity to IntercontinentalExchange despite its began trading as a public company last week, surged an incredible 234%. That is almost unheard of in most listed derivatives and stock markets.

With regard to the operational aspect of the Mastercard partnership, in addition to being able to provide cryptocurrency wallets and credit cards for banks, this will mean that even merchants and restaurants can begin to offer rewards in Bitcoin instead of traditional points, according to Bakkt CEO Gavin Michael.

With this level of confidence internally at traditionally conservative Mastercard, there is no question that the future is digital, and when looking at the skyrocketing stocks at Bakkt, the level of investor confidence is unprecedented too!

It is onwards and upwards for mainstream access to cryptocurrency.