Mastercard is to expand its cryptocurrency payment card program by seeking out further partnerships with cryptocurrency companies.
Despite recent regulatory scrutiny of banks and the cryptocurrency industry, the action is being taken. Raj Dhamodharan, Mastercard’s head of crypto and blockchain stated that the expansion plans were driven by the aim to provide people with secure access to cryptocurrencies.
Hundreds of international partners now provide crypto card schemes to Mastercard. It has collaborated with several cryptocurrency exchanges, including Gemini, Binance, and Nexo.
Due to the company’s cooperation with Binance, holders of Binance cards are now able to use funds from their exchange-held bitcoin holdings to make purchases in traditional currencies.
However, due to the failure of several significant cryptocurrency companies last year, including leading exchange FTX, banks are now wary of working with cryptocurrency clients.
Certain banks, including Santander and NatWest, have imposed restrictions on the amount of money U.K. residents can transfer to cryptocurrency exchanges in order to protect customers from fraud and scams.
Visa, a competitor of Mastercard, canceled its agreements with FTX for international credit cards in November 2022. American Express stated in February that it did not believe cryptocurrencies will soon take the place of its main lending and payment services.
Due to what U.S. officials allege is a lack of market compliance, they are tightening up regulation enforcement in the meantime. For instance, the U.S. Commodity Futures Trading Commission filed a lawsuit against Binance, the largest cryptocurrency exchange in the world, in March, alleging that it operated a “illegal” exchange and a “sham” compliance program.
Dhamodharan said, “We’re not here to pick winners. We’re not here to determine whether a particular transaction should take place or not” when asked if Mastercard was thinking about restricting the amount of money that may be sent to cryptocurrency exchanges via its payments network.
In addition, users of the Mastercard network must pass a number of compliance checks, according to Dhamodharan, who also mentioned that the corporation has invested in crypto analytics tools.
Finally, he asserts that Mastercard is enthusiastic about the blockchain technology that powers cryptocurrencies. Despite the stricter regulations, the company expects an increase in cash flow.
