According to CNBC, Mastercard is set to announce that any of the hundreds of banks and millions of merchants on its payments network will soon be able to integrate cryptocurrency into their goods.
This includes bitcoin wallets, credit and debit cards that generate crypto rewards and allow digital assets to be spent, and loyalty schemes that allow you to convert airline or hotel points into bitcoin.
To do so, the payments network is teaming with Bakkt, a crypto startup recently spun off by Intercontinental Exchange, which will provide custodial services for customers who join up behind the scenes, according to executives at the two companies.
“We want to offer all of our partners the ability to more easily add crypto services to whatever it is they’re doing,” Sherri Haymond, Mastercard’s executive vice president of digital partnerships, said in an interview. “Our partners, be they banks, fintechs or merchants, can offer their customers the ability to buy, sell and hold cryptocurrency through an integration with the Baktt platform.”
The revelation could result in a large increase in the number of people earning and spending bitcoin and other cryptocurrencies in the United States. Along with Visa, Mastercard administers one of the most powerful global payment networks, with over 20,000 financial institutions around the world. According to the corporation, there are 2.8 billion Mastercards in use.
Bitcoin’s popularity has stayed high as the original cryptocurrency has risen in value this year, reaching a high of more than $60,000 this month. For the first time this month, US regulators permitted the fund industry to issue a bitcoin-linked ETF, and huge institutional investors like bond giant Pimco revealed they were exploring trading crypto.
According to Haymond, this enthusiasm has caused Mastercard clients to contact the network for assistance in delivering crypto services. She claims that by doing so, banks will be able to keep their customers on their own platforms rather than watching their money transfer to cryptocurrency exchanges.
Bakkt’s stock, which went public last week, increased by more than 70% as a result of the announcement. Later Monday, at the annual Money20/20 conference in Las Vegas, Mastercard and Bakkt were expected to announce their cooperation.
According to Bakkt CEO Gavin Michael, the cooperation means that, in addition to providing crypto wallets and credit cards for banks, shops and restaurants will be able to give bitcoin incentives instead of standard points. Customers can exchange their existing points into crypto at rates determined by the partnering companies, allowing them to make a return, he said.
“We’re lowering the barriers to entry, allowing people to take something like your rewards points and trade them into crypto,” Michael said in an interview. “It’s an easy way to get going because you’re not using cash, you’re putting something that’s an idle asset sitting on your balance sheet, and we’re allowing you to put in to work.”