Payments giant MasterCard is set to launch a new program in collaboration with crypto-exchange Paxos. This new venture will aid financial institutions in offering crypto-trading services to their clients. As per a report published by CNBC, MasterCard will act as a “bridge” between Paxos and the banks.
The payments giant will reportedly take care of the security and regulatory compliance side of this arrangement. Ironically, these were the two main reasons cited by the company for avoiding this asset class in the first instance.
Role limited to compliance and monitoring
MasterCard will ensure that financial institutions are up to date in terms of regulatory compliance, in addition to verifying transactions and providing insights into anti-money laundering and identity monitoring.
Citing a poll conducted by MasterCard, Chief Digital Officer Jorn Lambert stated that the demand for crypto-assets remains, despite the crypto-winter. However, 60% of the respondents wish to explore this volatile asset class through their existing banks. This is likely where MasterCard’s services come in.
“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,” Lambert told CNBC.
Speaking on the topic of crypto-adoption, Lambert claimed that the crypto-industry will face difficulties in going mainstream. This, unless it embraces the traditional finance industry.
This collaboration is not MasterCard’s first foray into the crypto-space, however. The company has announced a series of joint ventures and partnerships this year.
Earlier this year, the payments giant teamed up with crypto-exchange Nexo to launch the first ever crypto-backed payment card.
In August 2022, MasterCard launched a prepaid card in Argentina, in collaboration with Binance. This card enabled everyday purchases through crypto for all Binance users in the country.
On 4 October, Mastercard announced the launch of Crypto Secure, risk assessment tool that helps in evaluating the risk profile of crypto-exchanges.