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META 1 Coin Report: Mastercard Will Allow Merchants to Accept Crypto

Mastercard has announced plans to settle transactions in crypto on its network. It will allow merchants to decide if they wish to receive payments in digital currencies, though it has not yet mentioned specifically which crypto will be supported.

This news follows earlier reports about its competitor, Visa, also entering the crypto arena. The goal of this initiative is to provide increasing flexibility to both its customers and merchants. Mastercard previously accepted a limited number of transactions using crypto partners Wirex and Uphold. However, those integrations only supported payments, not settlements of funds. Crypto coin payments were converted to fiat currency prior to depositing in merchant accounts.

This shift in strategy at Mastercard will potentially open new doors for shop owners and other businesses who have struggled during the pandemic. For consumers who have crypto and are willing to spend it, this initiative may provide a much-needed lifeline to businesses who could potentially benefit from increased consumer spending.

However, the increasingly popular trend of HODL-ing (Holding On for Dear Life), where crypto coin holders choose to hold onto crypto for long-term increasing value, may limit the full upside potential of accepting crypto for payments. This is especially true regarding Bitcoin, though it is not yet clear if it will be among accepted crypto coins for payments.

Mastercard will be determining its support for specific digital coins based on its “Principles for Blockchain Partnerships” framework which it released in 2019 after it backed out of Facebook’s Libra coin project partnership. This document outlines specific criteria that the card issuer values most in crypto coins, such as stability, consumer protection and regulatory compliance.

At the time of that framework’s release, Mastercard admitted that most of the 2600+ digital currencies in existence do not meet its requirements.

It seems that stablecoins that are pegged to fiat currencies will likely benefit most from Mastercard’s embrace of crypto. As their Executive Vice President for Blockchain and Digital Asset Products Raj Dhamodharan noted, “Our philosophy on cryptocurrencies is straightforward: It’s about choice. Mastercard isn’t here to recommend you start using cryptocurrencies. But we are here to enable customers, merchants and businesses to move digital value.”

Currently, few businesses accept crypto for payments. Tesla’s recent announcement about accepting Bitcoin remains a possibility, as it has not yet been finalized. However, it seems Mastercard is laying the foundation for a future widespread crypto economy. It has been quietly accumulating blockchain patents, as it holds 89 thus far with an additional 285 awaiting approval globally.

These patents focus on crypto-privacy, credit card payment verifications via blockchain, instantaneous blockchain payment processing, processing crypto refunds, and more.

The company began its foray into crypto in 2013 when it filed a patent for handling Bitcoin payments. It gave up this effort in 2015. In 2019, it began hiring a team of wallet developers and veterans from the crypto space. Mastercard now hosts a system which allows central banks to test digital currencies.

The current accelerated pace of developments in the payment space related to crypto support is unlike anything seen since the launch of Bitcoin in 2009. Recent announcements of crypto support from PayPal, Visa and now Mastercard are providing clear indicators of the major role that digital currencies will play in the mainstream economy in the future.

These developments are reminiscent of the rapid preparations in the early 1990s that companies like AT&T undertook while laying the groundwork for what would launch a few years later in the form of the Internet and email. Needless to say, this effort demonstrates a strong vote of confidence in crypto and blockchain from a major player in the financial payments space.

Just like the Internet began in a very limited way, with static websites and minimal functionality, so too the initial stages of widespread crypto support will likely focus on stablecoins and less volatile currencies. The demand and thirst for further advancement that led to ecommerce, streaming video, Web 2.0, social media and more will likely push the hands of even the most risk averse financial institutions to expand support of a growing field of cryptocurrencies.

META 1 Coin Trust sees these developments as promising, though the regulatory expectations will undoubtedly inhibit the true potential of mainstream financial platforms. Allowing a free-market system to govern itself will be the key to unlock true abundance and freedom for Humanity.

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