Highlights:
- Mastercard aims to take the next step in its acceptance of cryptocurrencies by allowing customers to accept such digital tools later this year.
- Some of the largest crypto-currency companies, including Wirex and BitPay, have already collaborated with Mastercard
- Earlier, RBI barred banks from handling crypto-currency transactions prior to 2018. However, SC lifted the ban last year in March & govt is working on the subject to regulate it
Mastercard has confirmed that it will add cryptocurrencies to its network. The key foreign payments in a blog post on Wednesday revealed that it would give priority to ‘stable coins’ or cryptocurrencies linked to fiat currencies such as the dollar.
The post said, “Regardless of your views on cryptocurrencies, from a dyed-in-wool fanatic to a complete skeptic, the truth remains that these digital assets are becoming a more significant part of the world of payments.”
The post also said, “We are currently preparing for the future of crypto and payments, announcing that this year Mastercard will actively start promoting selected cryptocurrencies on our network.”
Stablecoins must meet four requirements in order to be allowed on its network, according to Mastercard.
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First, these are consumer protections, including the protection and security of consumer information. Second, strict compliance including Know Your Client, a requirement designed to snuff out criminal activity in payment networks and deception. Third, in the regions in which they are used, digital assets must obey local laws and regulations. Fourth, crypto assets would need to provide the stability for spending, not investment, that people need in a vehicle.
In the past, the company has already collaborated with cryptocurrency players such as Wirex and Bitpay to launch cryptocurrency cards, but at their end, the post added, those players were converted cryptocurrencies to fiat currencies.
The blog post said, “Our move to support digital assets directly will allow many more merchants to adopt crypto, an ability that is currently constrained by proprietary methods unique to each digital asset.”
The step by Mastercard follows a PayPal announcement in 2020 that enables users to keep cryptocurrencies in their wallets. More recently, Tesla announced a $1.5 billion Bitcoin purchase and announced plans to accept bitcoin payments.
The move is likely to complicate the proposals made by the Indian government to ban private cryptocurrencies. Speaking in the Rajya Sabha on 9 February, Anurag Thakur, Minister of State for Finance, reported that a law on the subject is being finalized and will be submitted to the Union Cabinet shortly.
An online initiative called ‘IndiaWantsCrypto’ has been launched by the cryptocurrency industry in India to create public support for digital assets in India.
