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MasterCard plans to make crypto available to the public by easing its bank crypto transactions. The transactions giant will announce a plan to help financial companies venture into crypto trading on Monday. In general, MasterCard will work as a bridge for Paxos, a Cryptocurrency trading company that banks and PayPal are already using to offer services. The two companies will chip into security and regulatory compliance. These are the only two reasons that push banks to avoid crypto transactions.
Nonetheless, some users remain a bit skeptical about the idea. Cryptos like Bitcoin remain volatile. Several world’s top digital assets lost about half their value in 12 months. Besides, the digital assets industry has encountered numerous hacks since January, together with several high-profile bankruptcies. The chief digital officer at MasterCard says that digital assets are still in high demand. However, research indicates that about 60% of users would rather wait for the existing banks to ensure security and regulatory compliance.
Hence, investment banks such as JPMorgan, Morgan Stanley, and Goldman Sachs have dedicated Cryptocurrency teams but largely avoid selling it to customers. If these banks accept the new Partnership model with MasterCard, it could result in more competition for exchanges operating in the US, such as Coinbase. Overall, MasterCard says its role would be to ensure banks are in line with regulations through verifying transactions, following crypto compliance rules, and providing identity monitoring & anti-money-laundering services.
The company intends to launch the project next year’s first quarter and expand to more regions through 2023. Nevertheless, they were reluctant to publish banks that had already boarded the train. Despite the digital assets industry facing a “crypto winter,” more transactions moving forward could result in more activity that can fuel MasterCard’s business. Thus, experts warn that the current surge in crypto transactions does not imply the end of digital assets.
Soon as stakeholders invest in effective regulation, it will mean a higher degree of security with digital markets and resolve most concerns. Overall, Visa and MasterCard have partnership sprees in Crypto. The company has partnered with Coinbase on NFTs to allow merchants and banks in its network to provide crypto transactions. Meanwhile, Visa has teamed up with FTX to provide Cryptocurrency debit cards in 40 states and has over 70 crypto partnerships.
Likewise, American Express is exploring using its network and cards with Stablecoin. Stablecoin is pegged to another flat currency and the price of a dollar. Crypto might disrupt intermediaries and banks like Visa & MasterCard. They come with a tech that allows them to transact through blockchain without intermediaries. Nonetheless, MasterCard says that the digital asset industry has not made any worrying impacts on banks. Yet, experts worry that banks may not invest in the digital assets industry without embracing it.