Mastercard launches crypto trading for banks powered by Paxos
Credit card and finance company Mastercard Inc. is accelerating its foray into the cryptocurrency industry with Crypto Secure, a program designed to make it easier for banks and other financial institutions to offer cryptocurrency trading.
The Crypto Source program is designed to allow Mastercard’s users to buy, hold and sell cryptocurrencies through participating banks by expanding an existing partnership with Paxos Trust Co. Paxos is known for offering similar services to payments giant PayPal Holdings Inc., which launched its own crypto services in 2020.
Financial institutions that sign up to Crypto Source will offer premium cryptocurrency services for customers, allowing them to support select cryptoassets. Paxos will manage asset trading and custody services, while Mastercard will be integrated into banks.
The platform will also manage regulatory compliance and security management using Mastercard’s existing identity solutions, cryptanalysis, transaction monitoring, anti-money laundering, Know Your Customer, cyber security and biometrics.
Crypto Source will also be complemented by Mastercard’s recently launched Crypto Secure service, which uses artificial intelligence and blockchain data powered by CipherTrace to combat fraud and leverages technology from Ektata, an identity verification company acquired by Mastercard in 2021.
“At Mastercard, trust is our business. What we’re announcing today is a connected approach to services that will help bring users safely and securely into the crypto ecosystem,” said Ajay Bhalla, President of Cyber and Intelligence at Mastercard. “Our recent investments in this area, such as the acquisition of CipherTrace and Ekata, give us a unique set of capabilities to help our clients and consumers with the most technically advanced solutions available on the market.”
Banks will be able to offer customers a variety of cryptocurrency spending and payout options through a variety of different products, including crypto-linked cards, open banking and cross-border services that can transfer money in minutes instead of days. Mastercard will also offer banks the opportunity to use digital receipts and loyalty solutions using crypto assets.
Mastercard has been exploring blockchain and crypto payment technologies since 2016 when they introduced it as part of their developer programs.
The company’s continued moves into the cryptocurrency payments space mirror competitor Visa’s own exploration of the technology. It announced plans to allow crypto settlements on its own network in partnership with Crypto.com in 2021. Visa partnered with global cryptocurrency exchange FTX earlier this month to offer crypto-linked debit cards in 40 countries.
“Our commitment is simple – to explore crypto and the underlying digital asset technology to support consumer choice in payments,” said Jorn Lambert, chief digital officer at Mastercard. “Our crypto product innovations will provide choice at scale and continue to provide unique opportunities for financial institutions as they seek to offer new, advanced services to their customers.”
Mastercard Crypto Source is currently planned for a pilot program and is expected to be launched for general availability at a later date.
