Mastercard will assist financial institutions looking to offer cryptocurrency trading, the payments giants told CNBC on Monday, by acting as a “bridge” with crypto platform Paxos. It will also provide regulatory compliance and security.
The product will reportedly be piloted in the first quarter of 2023 before expanding to other locations.
Despite a severe downtrend in coin and token prices across the wider crypto market, demand for the still-nascent asset class still exists — according to polling referenced by Mastercard’s chief digital officer.
However, according to the report, clients would rather start by going through traditional banks, which have been reluctant to enter the crypto-trading space due to compliance and security concerns — hence Mastercard’s interest in stepping in. The company will assist in maintaining compliance with crypto-related rules, verify transactions, and provide anti-money-laundering and Know Your Customer checks.
“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,” Jorn Lambert, Mastercard’s chief digital officer, told CNBC.
Financial services companies pushing deeper into crypto
Mastercard and its primary competitor, Visa, have both been making headway into the blockchain and cryptocurrency industry in recent weeks.
Earlier in October, Mastercard made known its plans to debut a crypto-related fraud-prevention solution, dubbed Crypto Secure, for banks and card issuers. The product is powered by its recently acquired blockchain-security startup, CipherTrace.
Visa, meanwhile, is launching a debit card with the crypto exchange FTX in more than 40 new countries across Latin America, Europe and Asia. The card was originally introduced in the U.S.
The news comes only days after JPMorgan CEO Jamie Dimon called cryptocurrencies “decentralized Ponzis” — a sentiment that he has reiterated throughout recent years. JPMorgan, meanwhile, refers to itself as “the first global bank to offer a blockchain-based platform for wholesome payments transactions,” and has its own crypto of sorts, dubbed JPM Coin.
