Circle and Paxos will use fiat-backed stablecoins to settle crypto payments on the Mastercard network
Payments giant Mastercard announced yesterday plans to improve its payments card offering for cryptocurrency exchanges and wallets. This will involve collaborating with blockchain technology firm Paxos Trust Company, technology-focused Banking-as-a-Service provider Evolve Bank & Trust, and USDC stablecoin operator Circle.
The aim of Mastercard and its partners is to simplify the conversion of cryptocurrency to fiat currency. Currently, crypto payments must be settled in fiat currency on Mastercard’s network and this conversion can create operational challenges for crypto companies considering launching a crypto card programme.
With the help of Evolve, Paxos and Circle, Mastercard will drive the future of digital asset payments by bringing certain stablecoins onto its network. This solves the settlement challenge while providing security and compliance.
Circle’s Chief Strategy Officer and Head of Global Policy, Dante Disparte, said, “The collaboration between Circle and Mastercard demonstrates that dollar digital currencies like USDC play a foundational role in making payments more efficient and can facilitate new economic activity for businesses worldwide.”
Through their platforms, Circle and Paxos will use fiat-backed stablecoins to enable the conversion of crypto to fiat currency. This will make crypto payments easier to process for banks and crypto partners.
Paxos CEO and Co-founder, Charles Cascarilla, explained, “Paxos builds the underlying technology that will usher in an open digital economy. Our stablecoins are trusted, regulated and always fully backed one-to-one by U.S. dollars. We can facilitate instant settlement for transactions on a 24/7 basis, 365 days a year. By partnering with Mastercard, we’ll bring the benefits of crypto and blockchain to the everyday lives of consumers globally.”
The developments could see a flurry of new partners as Mastercard is in talks with Apto Payments, Galileo Financial Technologies and i2c Inc. to support processing and programme management. Mastercard could also provide real-time crypto wallet technology to BitPay and Uphold, as well as issuing cards to Metropolitan Commercial Bank and Evolve Bank & Trust.
BitPay CEO and Co-founder, Stephen Pair, commented, “BitPay believes the future of payments is on the blockchain because it transforms how consumers send, receive, and store money around the world. Working with Mastercard’s pilot to turn digital assets into dollars for everyday spending will accelerate consumers’ use of crypto as a means of commerce.”
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Author: Alice Leetham