Although many consumers have an inherent curiosity about crypto trading, there is also a fear of the unknown with reference to regulatory and safety issues. On Monday, Mastercard announced a program that would help financial institutions offer trading in cryptocurrency.
CNBC reported that Mastercard said that it would act as a “bridge” between Paxos, which is a crypto trading platform that is already in use by PayPal. and financial institutions. Banks have been hesitant to offer crypto trading services to their consumers due to issues such as regulatory compliance and security. These issues will be handled by Paxos and Mastercard.
When crypto platforms came into being, the main reason was to avoid what was termed as “middlemen” like Visa and Mastercard as well as banks, by using blockchain. However, crypto needs mainstream financial industry to expand its operations.
In an interview with CNBC, Mastercard’s chief digital officer Jorn Lambert said that there was demand for crypto as an asset but about 60 percent of consumers polled said that they would be wiling to acquire this asset class through their banks.
Mastercard said that it would follow crypto compliance rules to keep financial institutions on the right side of regulation. The payments company would verify transactions, provide anti-money laundering services as well as identity monitoring services.
The product will have a pilot in the first quarter of 2023. Following this pilot, there would be additional product in various geographies through the year. The digital head declined to name the banks that had tied up with Mastercard for the program.
Mastercard is not the only payments company to partner with crypto platforms including Coinbase. Visa had partnered with FTX to offer debit cards in crypto. American Express said that it was considering the use of its network and cards with stable coins, pegged to dollar or other fiat currency.
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