Financial services company Mastercard has given fresh credibility to cryptocurrencies this week by announcing it intends to start supporting payments using them on its network this year.
Many people remain very skeptical of crypto, and who can blame them? The price of Bitcoin is far from stable, and then there's the threat of someone stealing it. Mastercard looks to be taking a cautious approach, however, and being very selective in what it chooses to support.
"We are preparing right now for the future of crypto and payments, announcing that this year Mastercard will start supporting select cryptocurrencies directly on our network. This is a big change that will require a lot of work. We will be very thoughtful about which assets we support based on our principles for digital currencies, which focus on consumer protections and compliance," explained Raj Dhamodharan, executive vice president of Blockchain / Digital Asset Products & Digital Partnerships at Mastercard.
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Dhamodharan says the decision was taken to unlock choice for customers, merchants, and businesses. "This change may open merchants up to new customers who are already flocking to digital assets, and help sellers build loyalty with existing customers who want this additional option. And customers will be able to save, store and send money in new ways."
For now, it's unclear which cryptocurrencies Mastercard intends to support. There are hundreds to choose from, but Dhamodharan expects "consumers and the ecosystem as a whole will start to rally around the crypto assets that offer reliability and security." With that in mind, the company is focusing on four key features a cryptocurrency must offer to make it on to the Mastercard network:
The same level of security customers already enjoy from their credit cards.
Strict compliance protocols to block illegal activity and payment network deception.
Adherence to local laws and regulations on a per region basis.
Stability in terms of value so people can be confident in using crypto to pay for goods.
Mastercard already created crypto cards last year, holds 89 blockchain patents, and has a further 285 pending, so the company is clearly already heavily invested in crypto. Now it's preparing to take the next step into payments.