The traditional finance world and the decentralized world are becoming less distinct. As part of this evolution, Mastercard, a large payment processor, has just released its long-awaited Crypto Partner Program, which will assist in integrating digital assets into mainstream global commerce. By bringing together more than 85 heavyweights from the digital asset sector—including Binance, Ripple, and PayPal—the payment network is signaling a massive shift in how the world moves money.
Moving Beyond Parallel Systems
For years, digital assets operated largely in their own isolated bubble, completely separate from the traditional banking infrastructure used by everyday consumers. However, Mastercard’s latest initiative reflects a core belief that the next major phase of financial technology will be built through deep collaboration. The goal of this firm is to take blockchain technology out of the realm of imagination and make it applicable for everyday business purposes. The program intends to create a smooth combination of the programmability and speed of digital assets with the existing global card networks through transforming the innovations achieved through the use of blockchain into compliant (i.e., conforming) and scalable use cases.
Targeting Enterprise and Cross-Border Solutions
The major industry news is to increase the usability of cryptocurrency by retailers; however this new global partnership between Mastercard and the Ripple network has a much different focus, namely heavy duty enterprise-level utility. The new partnership will work collaboratively to create solutions for a wide variety of complex corporate challenges related to business-to-business money transfers, large-scale payouts and the movement of money between countries. The current method for sending an international wire transfer can take days before it is settled and uses an intermediary bank that charges high fees to settle the transaction. By combining the ability for blockchain to settle instantly with Mastercard’s ability to settle through their global network, which covers over 200 countries, this partnership hopes to speed the movement of money across borders with little to no delay or friction.
A Roster of Industry Heavyweights
The Crypto Partner Program will dramatically change how companies operate and their relationships with customers in the traditional financial services industry. Through the Crypto Partner Program, Mastercard unites more than 85 traditional financial services firms, fintech businesses and crypto-native businesses into one unified operating framework. Companies such as Binance provide an enormous amount of liquidity on a global basis, while Ripple provides technology to facilitate smart contracts across borders. Other companies participating in the program include Circle, Gemini, Paxos and Modern Treasury. By bringing together many of the world’s leading players in the cryptocurrency sector, Mastercard is developing an environment in which industry experts share knowledge and information to create common standards for responsible growth.
Building on a Strong Digital Foundation
The development of this extensive partnership network has taken time and numerous strategic investments in digital assets by Mastercard. The firm has continued to increase its presence through its Start Path blockchain accelerator program and Engage platform, both of which provided a platform for the launch of dedicated cryptocurrency-prepaid payment cards. Furthermore, this collaborative launch follows reports of Mastercard aggressively expanding its internal infrastructure, including a massive $2 billion acquisition deal for the stablecoin and regulatory technology startup Zerohash late last year.
The Future of Everyday Crypto Commerce
In this program, the objective is to allow users to spend and use digital currencies without any noticeable effort put in to making payments, or converting funds. Many of the implementations above show early examples of how this is working. As an example, MetaMask, an immensely successful self custody wallet application just launched a card on the Mastercard international payment network which allows the user utilise their digital account balances to pay and generate rewards in stablecoins. Another user will soon launch their preferred method of receiving payments in stablecoin using the global payment network of an existing bank or credit union. With the initial phases of the Crypto Partner Program going live and the traditional banking community embracing blockchain as the foundation of new age global payment systems, the financial services industry is now treating blockchain as an opportunity and not a threat.
