Mastercard Says Any Bank Or Merchant On Its Vast Network Can Soon Offer Crypto Services
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Key Points:
Mastercard is preparing to announce that any of the thousands of banks and millions of merchants on its payments network can soon integrate crypto into their products, CNBC has learned.
That includes bitcoin wallets, credit and debit cards that earn rewards in crypto and enable digital assets to be spent, and loyalty programs where airline or hotel points can be converted into bitcoin.
To do so, the payments network is partnering with Bakkt, the crypto firm recently spun off by Intercontinental Exchange, which will be the behind-the-scenes provider of custodial services for those who sign up, executives at the two firms told CNBC.
“We want to offer all of our partners the ability to more easily add crypto services to whatever it is they’re doing,” Sherri Haymond, Mastercard’s executive vice president of digital partnerships, said in an interview. “Our partners, be they banks, fintechs or merchants, can offer their customers the ability to buy, sell and hold cryptocurrency through an integration with the Baktt platform.”
The announcement could lead to a significant expansion in the ways regular Americans earn and spend bitcoin and other cryptocurrencies. The move comes after Visa has made clear intentions of diving into the cryptocurrency space. Now with the two corporations both being involved in the space, more than 20,000 financial institutions around the world can now gain direct exposure to the Web 3 crypto-economy. There are 2.8 billion Mastercards in use, according to the company.
Bakkt will serve as the gateway for Mastercard to make this all possible. Bakkt was listed on the New York Stock exchange on October 18th, 2021.
Cryptocurrency is not a secret anymore, over the last few years the public has become very aware of it’s existence. In essence this has led to a wide variety of Mastercard clients to request cryptocurrency services, according to Bakkt CEO.
Shares of Bakkt, which began trading as a public company last week, surged more than 100% on the news. Trading was halted at one point Monday so the company could announce another partnership. Mastercard and Bakkt were set to announce their partnership later Monday at the annual Money20/20 conference in Las Vegas.
Besides providing crypto wallets and credit cards for banks, the partnership means that even merchants and restaurants can begin to offer rewards in bitcoin instead of traditional points, according to Bakkt CEO Gavin Michael. Existing points can be converted into crypto at rates set by the participating companies, giving customers the ability to earn a yield, he said.
“We’re lowering the barriers to entry, allowing people to take something like your rewards points and trade them into crypto,” Michael said in an interview. “It’s an easy way to get going because you’re not using cash, you’re putting something that’s an idle asset sitting on your balance sheet, and we’re allowing you to put in to work.”