Mastercard to Help Banks Boost Crypto Access

Mastercard move comes during significant crypto winter

Jorn Lambert, Mastercard’s chief digital officer, told CNBC last Monday that while cryptocurrencies can still be “a little scary” to some market participants, it’s clear there is a lot of interest out there.

“There’s a lot of consumers out there that are really interested in this, and intrigued by crypto, but would feel a lot more confident if those services were offered by their financial institutions,” he said.

Mastercard is hoping to act as a security verifier in terms of compliance for banks, which have often said the risks associated with digital assets are a stumbling block for offering more services involving these new-wave options.

When asked about the ongoing crypto winter, which has left the industry in a bear market with limited upside, Lambert downplayed the price crash and indicated that he's focused on the long term.

“It would be shortsighted to think that a little bit of a crypto winter heralds the end of it — we don’t see that,” he told CNBC.

The executive said he expects the crypto industry to stabilize, and sees the current issues being solved in the years to come as more regulations are adopted in the DeFi space.

Mastercard, Visa continue to build crypto exposure

The move from Mastercard is not its first foray into the world of cryptocurrencies, nor for its competitor Visa (NYSE:V). The two credit card issuers have been pursuing partnerships and other entry points as well.

Mastercard recently acquired CipherTrace, a crypto insights company, as a way to expand its knowledge base in the DeFi space. For its part, Visa announced a partnership deal with FTX, a crypto exchange system, to offer debit card use in specific markets.

Visa CFO Vasant Prabhu put it bluntly, saying that while the company may not yet have a direct stance on cryptocurrencies as a whole, it has heard the interest of consumers loud and clear.

“We don’t have a position as a company on what the value of cryptocurrency should be, or whether it’s a good thing in the long run — as long as people have things they want to buy, we want to facilitate it,” Prabhu told CNBC.

Experts respond to Mastercard’s Paxos partnership

Marcus Sotiriou, analyst at publicly listed digital asset broker GlobalBlock Digital Asset Trading (TSXV:BLOK), said in an email note that the move from Mastercard could trigger further action from established financial institutions.

“MasterCard’s plan to integrate crypto could be an eye-opener for its competition like Visa, who may follow in MasterCard’s’ footsteps, in order to lead the payments industry in this sector,” Sotiriou said.

In an email to the Investing News Network, Elliot Johnson, chief investment officer and chief operating officer at Evolve ETFs, said Mastercard's decision represents another step toward mainstream adoption for the cryptocurrency space. “The opportunity is to maintain and increase relevance with their customer base by providing an access point for cryptocurrency products and services,” Johnson wrote. “This news shows they are listening to their customers and realize the opportunity is too big to ignore.”

The financial expert described the partnership between Mastercard and Paxos as a bullish move for both the credit card company and the cryptocurrency sector at-large.

“The expanding crypto market means deals like this tend to be mutually beneficial and will provide for a further boost to consumer confidence in the use of currencies like Bitcoin and Ethereum,” he said.

Investor takeaway

The Mastercard news is another sign of growing crypto interest from established financial players. “It’s hard to believe that the crypto industry will truly go mainstream without embracing the financial industry as we know it,” Lambert said.