Mastercard said Tuesday that it's working to simplify the currency conversion process for its card program for crypto wallets and exchanges. The fintech giant said new capabilities will make it easier for crypto providers to convert digital currency to traditional fiat currency.
Working with a series of partners including Evolve Bank & Trust, Paxos Trust Company, and Circle, Mastercard said it will begin testing the ability for banks and crypto companies to offer a card option for people wanting to spend digital currencies anywhere Mastercard is accepted.
Specifically, Paxos and Circle will use their platforms to facilitate the conversion of crypto to fiat through fiat-backed stablecoins, a class of crypto that's backed by reserve assets for price stability.
"Today, when people spend cryptocurrency such as Bitcoin, Bitcoin Cash, Ether, or Litecoin, it must enter and settle on Mastercard's network as traditional fiat currency, such as the U.S. dollar," the company said in a press release. "Until now, crypto providers planning to launch or expand card programs could find it operationally challenging to perform the currency conversion, a critical step preceding the settlement on Mastercard's network. Mastercard's engagement with Evolve, Paxos and Circle solves this challenge for players across the industry."
Mastercard said that making the process simpler will give more banks and crypto partners the ability to offer their consumers the option to pay with cryptocurrency.
In February, Mastercard announced that it was laying the foundation to be able to support select cryptocurrencies on its network. The company said at the time that its goal was to enable customers, merchants and businesses to move digital value, if they wished to do so.
Meanwhile, Mastercard last year teamed up with Wirex and BitPay to create crypto cards that allow people to transact using their cryptocurrencies; it then joined forces with cryptocurrency exchange LVL to do much of the same. In these instances, however, cryptocurrencies weren't moving through the Mastercard network. Rather, Mastercard's partners were converting the digital assets to traditional currencies, then transmitting them through to the Mastercard network.
In addition to forging further crypto exchange partnerships, Mastercard is also working with several major central banks around the world as they respectively review plans to launch new digital currencies. Mastercard boasts 89 blockchain patents, with an additional 285 blockchain applications pending.