Mastercard says any bank or merchant in its vast network will soon be able to offer crypto services
Mastercard credit cards
Roberto Machado Noa / LightRocket via Getty Images
The crypto-economy is about to thrive.
Mastercard is preparing to announce that one of the thousands of banks and millions of merchants in its payment network will soon be able to integrate crypto into their products, CNBC has learned.
This includes bitcoin wallets, credit and debit cards that earn crypto rewards and spend on digital assets, and loyalty programs where airline or hotel points can be converted into bitcoin.
To do this, the payments network is teaming up with Bakkt, the crypto firm recently formed by Intercontinental Exchange, which will be the behind-the-scenes provider of custody services for those who sign up, executives of both companies told CNBC. .
“We want to make it easier for all of our partners to add crypto services to whatever they do,” said Sherri Haymond, Executive Vice President of Digital Partnerships at Mastercard, in an interview. “Our partners, whether banks, fintechs or merchants, can offer their customers the ability to buy, sell and hold cryptocurrencies through integration with the Baktt platform.”
The announcement could lead to a significant expansion in the way ordinary Americans earn and spend bitcoin and other cryptocurrencies. Mastercard operates one of the world’s leading payment networks with Visa and maintains relationships with over 20,000 financial institutions around the world. According to the company, 2.8 billion Mastercard are used.
Gavin Michael, CEO of Bakkt, rings a ceremonial bell on the floor of the New York Stock Exchange (NYSE) in New York City on October 18, 2021.
Brendan McDermid | Reuters
Interest in Bitcoin has remained high as the original cryptocurrency surged this year, hitting a record price above $ 60,000 this month. U.S. regulators cleared the fund industry to offer bitcoin ETFs for the first time this month, while large institutional investors like bond giant Pimco have said they are considering trading in cryptos.
This interest has led Mastercard customers to seek help from the network in providing crypto services, according to Haymond. That way, banks can keep customers on their own platforms rather than having dollars migrate to crypto exchanges, she said.
Shares of Bakkt, which began trading as a public company last week, jumped more than 70% on the news. Mastercard and Bakkt were due to announce their partnership later Monday at the annual Money20 / 20 conference in Las Vegas.
In addition to providing crypto wallets and credit cards to banks, the partnership means even merchants and restaurants can start offering rewards in bitcoin instead of traditional points, according to Bakkt CEO Gavin Michael. Existing points can be converted into crypto at rates set by participating companies, giving customers the opportunity to earn a return, he said.
“We are lowering the barriers to entry, allowing people to take something like your reward points and redeem them for crypto,” Michael said in an interview. “It’s an easy way to get started because you’re not using cash, you’re putting something that’s an inactive asset on your balance sheet, and we allow you to put it to work.”