The two players will work on helping businesses to accept crypto payments at their end. Mastercard will leverage Circle’s USDC stablecoin to facilitate instant settlement at their end.
On Tuesday, July 20, payments giant Mastercard Inc (NYSE: MA) announced its partnership with USDC stablecoin-issuer Circle. The two partners will work on a pilot program to facilitate crypto-to-fiat conversions.
Thus, it clearly aims to help businesses simplify the process of accepting crypto payments. Simultaneously, it will help crypto users spend their digital assets for daily purchases.
Mastercard and Its USDC Initiative
Mastercard will leverage Circle’s USDC stablecoin to simplify the settlement at their end. Mastercard said that this will lead to “helping accelerate the world towards greater use of internet-native financial infrastructure”. Speaking about the development, circle CEO Jeremy Allaire said:
“The engagement between Circle and Mastercard reinforces how USDC is growing its role in payments and commerce on the internet, while building a vital bridge between digital currency payment systems and large, established payment networks. We are thrilled to work with Mastercard to simplify card offerings for cryptocurrency companies.”
This partnership between Mastercard and Circle will be solving the most critical issue of instant crypto settlements. This will further help in expanding the scope of crypto use in daily life. Thus, more businesses will offer card options that will allow customers to spend their crypto assets anywhere.
The Circle CEO said that the move will also push the use of USDC in internet-based payments and commerce. It will also help to build a strong bridge between crypto payments solutions and traditional payments. Raj Dhamodharan, executive vice president of digital asset division at Mastercard said:
“The engagement between Mastercard and Circle fuels new payment opportunities and commerce in digital currencies. The cryptocurrency market continues to mature and we are driving it forward together to reduce friction and create choice for people.”
Mastercard’s Growing Crypto Ambitions
Mastercard has initiated several measures to keep pace with the growing crypto industry. In a survey earlier this year, Mastercard found that 40% of its users want to use crypto to make payments by the next year of 2022.
Even before that back in February 2021, the payment giant said that it will add crypto support by the end of 2021. “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,” it said.
On the other hand, Mastercard is also quite positive about the emergence of central bank digital currency (CBDC). The company already holds some key patents to its name which is give a lead over competitors once CBDCs are out in the market.
Working in this direction, Mastercard unveiled a platform allowing central banks to test CBDCs. The platform will help central banks to simulate different use-cases and test roll-out strategies between commercial banks and other payment services providers.
This new development with further Mastercard’s ambitions to expand its footprint in the crypto space.