Mastercard on Wednesday announced it is preparing to allow customers to use some cryptocurrencies directly on its network later this year, joining a handful of corporates that have embraced the rise of digital assets.
Earlier this week, Tesla revealed a $1.5 billion bitcoin investment and said it would soon begin accepting the token as payment for its products.
Mastercard said it is seeing more people using cards to buy crypto assets such as Bitcoin, as well as more people using crypto cards to access and convert these assets into traditional currencies for spending.
“We are preparing right now for the future of crypto and payments, announcing that this year Mastercard will start supporting select cryptocurrencies directly on our network,” Raj Dhamodharan, executive vice president of digital asset products said in a blog on Wednesday.
Mastercard already allows cardholders to spend digital assets via external platforms. But this means the transaction doesn’t actually go through its own network. But now, the company aims to support crypto partners by allowing many more merchants to accept digital tokens. This would “cut out inefficiencies, letting both consumers and merchants avoid having to convert back and forth between crypto and traditional to make purchases,” Dhamodharan wrote.
The company said it was also “actively engaging” with central banks around the world to possibly launch new digital currencies so people have a new method to make payments.
While several institutions and governments around the world are embracing crypto and other digital forms of payments, the Nigerian Central Bank last week directed financial institutions to identify persons and entities transacting in cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.
This regulatory directive came as a shock to many Nigerians who described it as a step in the wrong direction.
Mastercard said it will not support all cryptocurrencies on its network, as many of them need to tighten their compliance measures. “We will be very thoughtful about which assets we support based on our principles for digital currencies, which focus on consumer protection and compliance,” the company said.
The company did not specify which tokens would qualify for use on its network.